Controversial Brooklyn Developer Files For Personal Bankruptcy
Louis Greco has filed for personal bankruptcy, the culmination of dozens of lawsuits, foreclosures, multimillion-dollar judgments and two attorney general investigations against the prolific Brooklyn developer.
The founder of Second Development Services filed for Chapter 11 protection on Friday, estimating that he has between $10M and $50M in assets and between $100M and $500M in liabilities.
Greco has developed more than 100 projects, but an investigation by Bisnow this year found that behind those buildings is a pattern of unpaid workers, unresolved violations and unfulfilled promises as he has jumped from one project to another.
Greco seems to see the bankruptcy as a speed bump rather than a stop sign.
“The current projects will not be affected,” Greco told Bisnow in an email Tuesday. “Upon a completion of the reorganization we will continue to seek new projects.”
Greco’s bankruptcy, which was first reported by PincusCo, will be combined with his wife Linda’s Chapter 11 filing from last year, which Greco said in an email “was necessary in order to achieve a successful reorganization of my wife's estate.”
A company owned by Greco, Aherman LLC, also filed for bankruptcy since it has common creditors and overlapping ownership of property with the Grecos, according to the filing. The LLC has between $1M and $10M in estimated assets and $10M to $50M in liabilities, according to its filing.
Greco and his wife have moved out of their apartment in Brooklyn Heights. They plan to sell the six condo units that they own in the building, with the exception of one, which they hope to lease back from a senior lender, identified in the filing as Wendover Funder LLC.
Those assets have an estimated value of $14M, according to the filings.
The bankruptcy is complicated by a lawsuit. In 2020, North Hill Capital Management sued Greco’s firm over 232-40 Smith St., where he had planned a retail building. The site is subject to at least seven lawsuits filed between 2018 and 2021, Bisnow previously reported.
North Hill won a nearly $30M judgment in 2023, which Greco is angling to avoid by filing for Chapter 11. The last filing in the case, recorded in court two days before the bankruptcy petition, says that though his wife is in bankruptcy, the lender is able to seize Greco’s 50% stake in Aherman and the property.
“That decision is not final, and this Chapter 11 case is being filed prior to the entry of an Order on that decision, so as to stay any further efforts by [North Hill] with respect to Aherman while we effectuate the liquidating plan,” Greco wrote in the petition.
Greco has nearly 100 creditors listed, but North Hill is the only secured one. Some have previously filed lawsuits against Greco. Others are former business partners, including Barry Leone and Mario Procida.
The creditors also include government entities, such as the IRS, the New York City Department of Finance and Department of Law, and the Office of the New York State Attorney General and the state Department of Taxation and Finance. He also owes debts to American Express, Citibank and Chase Visa.
The bankruptcy filing doesn't make note of the vast majority of developments that Greco has been involved in.
Residents at one of his projects, at 475 Washington St., have sued the developer, alleging fraud and self-dealing, and it has been the subject of a New York attorney general's investigation, Bisnow reported. The lender on the six-story condo building foreclosed on the property following a $35M loan default.
“I am a real estate developer by profession and I have enjoyed great success and great failure,” Greco wrote in his bankruptcy filing. “Currently, my failures are now overcomplicating my life and require bankruptcy intervention.”
