Eastgate Whitehouse LLC, a Rye-based real estate company that has been accused of defaulting on a $32.1 million mortgage, has petitioned for bankruptcy protection.
Eastgate has yet to file schedules detailing its finances, but the Chapter 11 petition filed in U.S. Bankruptcy Court in White Plains estimated that assets and liabilities both range from $10 million to $50 million.
Eastgate is operated by William W. Koeppel, a scion of a Brooklyn real estate dynasty that eventually split into two separate family entities.
The business is based at Koeppel’s mansion in Harrison but the main asset, a 15-story apartment building, is at 350 East 52nd St., Manhattan.
Eastgate refinanced the building in 2018 with a $32.1 million, 10-year interest-only balloon loan from Barclays Bank. Koeppel personally guaranteed the loan.
This past May, Wilmington Trust, the mortgage trustee, sued Eastgate and Koeppel to foreclose on the loan. It is demanding that a receiver be appointed to manage the rents and profits and that the apartment building be sold to pay off the loan.
Wilmington claims that a year ago Eastgate stopped paying the monthly interest payments. It also alleges other defaults, for instance, failing to disclose that Koeppel had filed for personal bankruptcy shortly before the mortgage loan closed.
Eastgate and Koeppel broadly denied the accusations in their answer to the complaint. They accused Wilmington Trust in a counterclaim of failing to use a $260,000 insurance payment to restore a commercial space in the apartment building that was damaged in a fire last Christmas.
Koeppel states in an affidavit that he and his attorney told the mortgage broker about his personal bankruptcy when they were negotiating the loan and the mortgage broker told Barclays.
“Leaving that aside,” he stated, “it also seems highly improbable that Barclays Bank would not have run a title search … which would have disclosed the bankruptcy filing.”
Koepple declared $66 million in assets and $10.3 million in liabilities in his 2018 Chapter 11 reorganization case. He attributed the bankruptcy to a pending $7 million judgment for legal fees.
His primary assets were the Eastgate Whitehouse apartment building valued at $46.6 million and a Brooklyn property valued at $9.8 million. (According to a loan document, the Eastgate property was appraised in 2018 at $62.9 million.)
He valued his Harrison house at $5 million, and five cars and 4 watercraft at more than $1 million.
Koeppel had income of $1.12 million in 2017, according to a bankruptcy schedule, and he was making $95,250 a month in income in 2018 but spending $100,677 a month.
Besides the $32.1 million mortgage debt, which is listed as disputed, the Eastgate petition shows unsecured claims of $5.4 million in loans from Koeppel and $596,000 in legal and accounting fees.
