Kramer Levin Steers Pro Bono Client 2178 Atlantic Avenue HDFC through Chapter 11 Case

Kramer Levin achieved a significant win for 2178 Atlantic Avenue HDFC, a non-profit housing cooperative of low-income tenants residing in a 16-unit residential building located in Brownsville, when its Chapter 11 plan of reorganization was confirmed and consummated following a protracted court battle.

The HDFC filed for bankruptcy protection in the United States Bankruptcy Court for the Eastern District of New York following a foreclosure auction in which a real estate investor gained title to the building. The Kramer Levin team’s successes included defeating the investor’s motion to lift the automatic stay, and, following a contested evidentiary hearing, prevailing on a motion to extend the HDFC’s time to regain title to the building. The Kramer Levin team successfully argued that numerous irregularities in the foreclosure process warranted such an extension, an unprecedented result, as there are no reported decisions in which the relief requested was granted. The Kramer Levin team also successfully defended the decision from various stay motions filed with the bankruptcy court, the district court and the Second Circuit.

Utilizing the additional time granted by the bankruptcy court, the HDFC proposed and moved for confirmation of a Chapter 11 plan of reorganization predicated on financing from Habitat for Humanity New York City Community Fund. The Kramer Levin team defended the plan from objections by the investor and defended multiple depositions of confirmation witnesses. The Kramer Levin team then litigated the amount that the investor was owed which was resolved in mediation at a significant discount to the asserted amount.

The Kramer Levin team is led by Bankruptcy and Restructuring special counsel Joseph A. Shifer and includes partner P. Bradley O’Neill, counsel David E. Blabey, Jr., and associates Rose Hill Bagley and Hunter Blain.

New York Law Journal covered the case in an article on Aug. 26, 2020.