R
&B Realty Group filed for bankruptcy on two Midtown office properties, despite having narrowly avoided foreclosure a few years ago. The move blocks Lightstone Capital from collecting past-due debts tied to a $52 million loan used to purchase the buildings in May 2022.

    Lightstone sued R&B in May, alleging that Aron Rosenberg's firm had "blatantly misappropriated" around half a million dollars from the properties' clearing account. The lawsuit claims R&B defaulted on senior debt and failed to deposit rents as required by loan terms. Two months ago, R&B agreed to the appointment of a receiver to collect past-due rents and profits.

    Rosenberg has been involved in court battles over the two Garment District buildings for over three years. He previously secured an eleventh-hour $51 million loan from Ladder Capital after Maverick Real Estate attempted to foreclose on the properties in 2021. R&B refinanced with Lightstone a year later, but quit paying debt service soon after.

    As of May 2024, when Lightstone filed suit, 32 West 39th Street was 77% vacant and 28 West 36th Street was 8% vacant. The lender alleges that R&B was skimming money from the clearing account instead of depositing all rents and revenue as required. It's unclear what, if anything, the receiver appointed in August has collected from the borrowers.