99 Sutton asks court to authorize emergency access to cash collateral

By Sarah Lizee

Olympia, Wash., Jan. 27 – 99 Sutton LLC is seeking emergency court approval to access the cash collateral of 99 Sutton Lender LLC, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Eastern District of New York.

99 Sutton acquired the apartment building located at 99 Sutton Street, Brooklyn, N.Y., on Dec. 22, 1999, and was party to a consolidated mortgage as of Oct. 27, 2015 in the amount of $19.5 million, which was assigned to 99 Sutton Lender on Sept. 8.

The company said that, due to the effects of Covid-19 on rent collection, it fell behind on payment of real estate taxes. Customers Bank, the predecessor to the current lender, had advanced the outstanding taxes and issued a notice of default on Sept. 24.

“The debtor disputes that the loan was properly put into a default status or properly accelerated because Customers Bank no longer held the mortgage when the notice of default was issued,” Simon Whitley, the manager of the debtor, said in a declaration filed Thursday.

“For these reasons, the debtor has not been able to reach a consensual cash collateral agreement with [99 Sutton Lender].”

However, the company is still seeking an emergency cash collateral authorization until a determination is made on the validity and extent of the lender’s security interest.

The company said it needs access to the cash collateral in order to maintain the property, pay utilities and preserve the value of the property.

The Brooklyn, N.Y.-based property owner filed Chapter 11 bankruptcy on Dec. 20 under case number 21-43124.

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