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Prospect Park Residence owner faces foreclosure • Brooklyn Paper

Prospect Park Residence owner faces foreclosure

Old people problems: The building at One Prospect Park West is home to the adult daycare which had workers indicted for supposed shady practices as well as the assisted living facility that is trying to evict its elderly residents.
Photo by Jason Speakman

The owner of embattled Park Slope old folks’ home Prospect Park Residence may lose his tony park-side property now that his creditors have come calling.

Owner Haysha Deitsch — who recently settled a lawsuit for $3.35 million with tenants he tried to evict in 2014 so he could sell the building for $76 million — has defaulted on the $33.4 million mortgage he took out to buy the nine-story building in 2006, and now a real-estate investor operating under the name Prospect Park Holder has purchased the debt and is foreclosing on the property, court documents filed in April reveal.

Deitsch’s attorney Frank Carone said he plans on filing a motion to dismiss the suit, but won’t say on what basis until he has done so.

But Deitsch isn’t the only one with something at stake.

A foreclosure would erase $10 million in liens that courts have placed on the property as part of ongoing wrongful death suits filed by the families of seniors who died in the nursing home — effectively setting aside money to make sure they get paid if they win — and now their lawyer is worried the home could wriggle out of paying.

“It means my clients might not get paid,” said attorney John O’Hara, who has seven wrongful death suits pending against Prospect Park Residence. “That was the whole point of the order of attachment.”

O’Hara’s suits charge the nursing home with allegedly ignoring a 2009 Health Department report concluding that it should transfer 37 seniors at the residence to other facilities, court records show.

Prospect Park Holder’s lawyer confirmed that a foreclosure would nix the liens.

“The attachment orders are subordinate interest, so if we foreclose, those would be extinguished,” said attorney Jerry Feuerstein.

Feuerstein said he wasn’t allowed to name the actual firm behind the holding company that now owns Deitsch’s debt, but described it as “an institutional real-estate fund.”

Court documents name Prospect Park Holder’s manager as Brian Shatz — the same name as a founder of Manhattan real-estate management firm Madison Realty Capital, and Carone said he has seen that company’s name on court documents.

Shatz did not return requests for comment.

O’Hara, however, has a different theory — he filed a counterclaim in May alleging that Prospect Park Holder is really Sugar Hill Capital Partners, the real-estate fund Deitsch was supposed to sell the building to in 2014, before residents sued and a judge ordered him to keep the home open throughout the two-year legal battle.

O’Hara’s suit alleges the firm is colluding with Deitsch in order to complete the exchange without the expense of the liens.

Both Carone and Feuerstein said the charges are false and outrageous.

“It’s a complete frivolous joke,” said Carone. “There’s no other way to describe it.”

The recent settlement means the building will soon be empty — in exchange for the payout, the litigious elderly tenants agreed to leave within three months.

The 134-unit building was first built in 1931 as a fraternal clubhouse — complete with ballrooms and bowling alleys — before it became a nursing home in 1962.

Reach reporter Colin Mixson at cmixson@cnglocal.com or by calling (718) 260-4505.

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