A Mount Kisco developer has filed for bankruptcy protection, declaring that it has 39-cents to its name versus a $21 million liability.
Gateway II LLC, the sponsor of a Harlem condominium beset by construction defects, filed a Chapter 7 liquidation petition on April 17 in U.S. Bankruptcy Court, White Plains.
The only asset is a checking account. The only creditor is the Board of Managers of the Gateway Condominium.
Gateway II is owned equally by Michael Gaetano, of Armonk, who was the condo project finance manager; Matthew Gaetano, the construction manager; and the Gaetano 2013 Family Trust.
The business was formed in 2000, according to a state corporation record. It built the Gateway Condominium at 2098 Eighth Ave., also known as Frederick Douglass Boulevard, near Morningside Park.
The developer combined several lots, renovated four small buildings and integrated them into a new 11-story structure with 85 residences and retail and office spaces.
In 2014, the condo’s board of managers sued Gateway II for $21 million, alleging that the building was plagued by defects — such as inadequate fire proofing, leaks and structural problems — and claiming that it was forced to make extensive repairs.
The lawsuit alleged breach of contract for failure to renovate and build the structure in compliance with zoning and building regulations.
Specifically, the offering plan required Gateway II to obtain a permanent certificate of occupancy.
As of February 2022, according to a decision issued by Justice Sabrina Kraus of Manhattan Supreme Court, the building still did not have a permanent certificate of occupancy.
She granted the condominium board summary judgment against Gateway II, ruling that the developer’s failure to obtain the occupancy certificate for ten years breached the offering plan.
Gateway II appealed the decision to the First Appellate Court, and it lists the $21 million claim as disputed in the bankruptcy petition.
The developer is represented by New Rochelle attorney James H. Shenwick.
