Marathon CRE 2018-FL1 Issuer, Ltd. v. 257-263 W 34th Street LLC

Background

Leslie Feifer stated that a New York state court had appointed her as receiver for the property known as 257-263 West 34th Street. A receiver is a person appointed to manage property during a legal proceeding. Feifer said she had posted a $10,000 bond and had begun acting as receiver. After the action was removed from New York state court to the Southern District of New York, she continued serving in that role because no order had discharged her.

The state-court order required the receiver to obtain advance written court approval before hiring professionals for the property. Feifer therefore asked the federal court for permission to retain and compensate five professionals: Jaspan Schlesinger LLP as attorneys; G&E Real Estate Management Services, doing business as Newmark Management, as property manager; Cushman & Wakefield, Inc. as real-estate leasing agent; Janco Building Consultants LLC as expeditor; and Antonucci & Associates, Architects & Engineers, LLP as structural engineer.

Requested Services and Payment

The law firm would advise the receiver about leases, tenant proceedings, vendor agreements, insurance, construction-related access and protection issues, and matters before the court. Feifer requested permission to retain the firm retroactively, beginning March 10, 2022. The proposed hourly rates ranged from $200 to $750, with the stated attorney rates ranging from $375 to $750 and paraprofessional rates ranging from $200 to $300. Fees unrelated to a construction access agreement would be paid from receivership proceeds upon application to the court; the neighboring property developer was expected to pay fees related to that access agreement.

Newmark would provide daily property-management and maintenance services, including work related to elevator maintenance, possible basement flooding, capital improvements, repairs, and tenant alterations. Its management fee would be paid from receivership proceeds. Cushman & Wakefield would market and lease vacant units on the first through fourth floors, with commissions paid from receivership proceeds.

Janco was proposed to help address an expired temporary certificate of occupancy, including by identifying a new architect and handling related filings and permits. Its proposed compensation included an $8,000 retainer, plus additional fees and expenses. AAAE was proposed to review structural issues involving rooftop protection connected to construction at 255 West 34th Street. Its proposed compensation included a $3,500 retainer and hourly rates of $200 to $350. The developer was expected to pay for related engineering services, but Feifer sought authority to retain and compensate AAAE if that developer failed to pay.

Court’s Action

On August 25, 2022, the court stated that it had received the receiver’s letter application. It invited the parties to submit a joint letter stating their respective positions on the request by September 2, 2022. The court did not grant or deny the requested retentions or compensation in this order.

Disposition

The court ordered the parties to submit their positions by the stated deadline. The opinion does not state a final ruling on whether the receiver may retain or compensate any of the five professionals.