Nightingale, led by CEO Elie Schwartz, was already entangled in lawsuits and is facing questions over funds raised for deals in Miami and Atlanta.
The plan, which needs bankruptcy court approval, also includes a proposed settlement with CrowdStreet.
Nightingale defaulted on its $30M loan for the property last year.
Liquidating the assets, several of which Nightingale CEO Elie Schwartz is already battling to hold on to, in a tough market will be no easy feat.
Competitors were quick to emphasize their own due diligence practices.
After Nightingale entities raised more than $60M for two projects, just $126K is in their accounts.
The failure to close on the sale of 1601 Washington Ave. comes as CEO Elie Schwartz begins repaying investors $53M in allegedly misappropriated funds.
The independent manager who took over two Nightingale-tied accounts delivered the news in an update to investors on Friday.
An additional $500K went to an insurance provider. It is unclear what the payments were for.
No details were offered on a potential settlement and one investor said he remains doubtful the special manager will recover all the funds.
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