Part of the twisting legal drama of a developer who helped put Hudson Square on the map seems to be coming to an end.
The 3,000-square-foot penthouse in the Printing House condo owned by Barnet Liberman, who helped convert the formerly industrial building into residences in the late 1980s, when such a thing was unusual, is set to be auctioned off as part of a foreclosure proceeding on Wednesday at Manhattan's state Supreme Court, according to a legal notice that appeared this week.
In November Justice Francis Kahn hit Liberman with a $7.6 million judgment for defaulting on a mortgage issued by Axos Bank in 2017. The top-floor spread at the block-long Hudson Street development must be sold to satisfy that judgment, based on Kahn's ruling.
Liberman and his wife, Phyllis, who was also a defendant in the Axos-brought suit, could not immediately be reached, and their lawyer, Sanford Rosen of Midtown-based Rosen & Associates, did not return a call before press time.
Liberman had previously denied all of Axos' accusations and in fact filed for Chapter 11 bankruptcy protection in April 2021 (later amended to Chapter 7 protection), a somewhat common move to protect real estate from being foreclosed upon. But the bankruptcy court lifted the stay that was blocking the foreclosure in January 2022, allowing Axos' claim to go forward.
In 1988 Liberman and Chamberlin were approved to convert the 10-story, 256,000-square-foot mixed-use property between Leroy and Clarkson streets, which had been functioning for several years as rental, into a 184-unit condo, based on its offering plan.
But only about 70 of the apartments sold, according to news reports and the register, and Liberman appears to have rented out the remainder of the units instead. (An investment group led by developer Myles Horn bought 113 unsold units there in 2012 for $68 million and began to re-market them, records show.)
Whether Liberman truly owned the penthouse became a subject of debate in the Axos case. The register shows a 2003 transaction whereby Liberman paid $500,000 to Chamberlin for the apartment; he and his wife transferred the combined unit into an opaque shell company called Hudson 805 LLC in 2013.
City tax records, which tend to undervalue homes by about half, show its current market value to be $1.4 million.
Whether the auction really comes to pass remains to be seen. A previous auction date in July was scrapped at the last minute at the request of the trustee in the case, who said he is seeking Department of Buildings approval to combine the penthouse with an adjacent commercial unit and thus boost its value.
Michael Driscoll, the lawyer with Mullin Richter & Hampton who brought the suit on behalf of Axos, declined to comment.
Also a message to the trustee overseeing the suit, attorney Marc Pergament, went unreturned.
The mortgage case in a way was the tip of the iceberg for Liberman, a once-busy builder who with his business partner, Winthrop Chamberlin, was a pioneer in converting downtown commercial sites into multifamily projects, like a prewar former hospital at 305 Second Ave.
Indeed, when Axos sued Liberman three years ago over a debt that Axos had apparently been trying to collect since 2020, he was already facing a long list of allegedly unpaid bills, public records show.
Those debts, based on court documents and liens on file in the city register, included his allegedly owing around $7 million to the IRS, $600,000 to his condo's board for unpaid common charges, $2 million to prominent real estate attorney Gary Rosenberg and about $500,000 to the state of New York's Tax Department.
In recent years some of those parties battled Axos in court, according to court filings; the outcome of those efforts was unclear at press time.