FEGS reaches $1.6 million stipulation tied to property sale objections

By Caroline Salls

Pittsburgh, Nov. 17 – Federation Employment and Guidance Service, Inc. (FEGS) requested court approval of a stipulation reached with the official committee of unsecured creditors appointed for its bankruptcy case and the Harry And Jeanette Weinberg Foundation, Inc., according to a motion filed Thursday with the U.S. Bankruptcy Court for the Eastern District of New York.

FEGS said the foundation filed limited objections to the sale of the company’s Surf Avenue property in Brooklyn, N.Y., and its Jerome Avenue property in Bronx, N.Y., in connection with pre-bankruptcy capital improvement project agreements between FEGS and the foundation.

Under grant agreements, the foundation advanced FEGS $1.6 million. Under the grant agreements, all of the proceeds from the sales of the properties were restricted funds and could only be distributed to a non-profit entity whose principal purpose is similar to that of the company’s, subject to the foundation’s consent.

FEGS said the sales have closed, and it is holding the sales proceeds subject to further court order.

Under the proposed stipulation, FEGS will pay the foundation $1.6 million in satisfaction of all claims.

The foundation must use the proceeds from that payment to fund grants to non-profit entities in the New York Metropolitan area whose purpose is similar to that of FEGS.

In addition, the foundation will withdraw its sale objections.

FEGS is a New York-based nonprofit health and human services organization that filed for bankruptcy on March 18, 2015. Its Chapter 11 case number is 15-71074.

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