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Petition for bankruptcy dismissed

In Uncategorized on January 27, 2009 at 12:03 pm

Bid by local business denied due to “gross mismanagement”

By CATHY WOODRUFF, Business writer
Click byline for more stories by writer.
First published: Tuesday, January 27, 2009

http://timesunion.com/AspStories/story.asp?storyID=763887&category=BUSINESS

ALBANY — A federal bankruptcy judge has dismissed a bid for Chapter 11 reorganization sought by a local business that purchased homes facing foreclosure and leased them back to the former owners.
Judge Robert E. Littlefield Jr. of U.S. Bankruptcy Court in Albany approved the dismissal Thursday, based on a recommendation from Trustee Diana G. Adams.

Adams moved for dismissal of the case based on “gross mismanagement” of the holdings of the two related companies, Rivertown Investments LLC and Momentum Properties LLC, owned by Geoffrey Goldman of Albany.

Rivertown was the operating entity for the enterprise, collecting rents and performing other management tasks; Momentum was the real estate holding company.

The enterprise held an interest in some 56 properties, including 11 that are now vacant, according to the trustee’s motion.

In arguing for dismissal of the Chapter 11 proceeding, Adams noted that the properties were not insured and that Goldman’s wife was living rent-free in one of the companies’ properties in Ridgewood, N.J. The home had been purchased for $1.1 million in August 2006.

The motion also alleges that some of the mortgages were not sought in the companies’ name but in the names of others, then later transferred to ownership by Goldman’s companies.

Justin Heller, an attorney with the Albany law firm Nolan & Heller LLP representing Goldman’s enterprise in the bankruptcy court proceeding, said efforts will continue to help former homeowners obtain renegotiated mortgages from the lenders.

The aim had been to streamline the process and bring mortgage holders to the table with the help of bankruptcy court, Heller said, but with the dismissal of the case, “I think it’s going to be more labor-intensive.”

http://timesunion.com/AspStories/story.asp?storyID=763887&category=BUSINESS

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