Meridian Capital Group is in line to become the exclusive financing broker for All Year Holdings’ bankrupt $1 billion real estate portfolio in Brooklyn.
The request is before a bankruptcy judge in New York’s Southern District. If Meridian gets the green light and is able to ink a deal with a new lender, it could be in for a hefty payday.
All Year tapped Meridian to broker its equity recapitalization in April where Meridian solicited offers from outside investors for its multifamily-focused portfolio of 110 properties across Brooklyn.
All Year, however, was unable to nail down a deal. It was also unable to reach an agreement with its founder, Yoel Goldman, who stepped aside from decision making last year. The Brooklyn-based company filed for Chapter 11 in December amid debt woes and lawsuits.
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All Year said it had no choice but to seek bankruptcy after it discovered that Goldman was entering into confessions of judgment on behalf of the company without its approval.
All Year’s motion to have Meridian as its broker is not surprising. In December, Meridian brokered the sale of All Year’s Denizen apartment complex in Bushwick for $506 million to Atlas Capital Group. Meridian also arranged $367.5 million in acquisition financing on behalf of Atlas Capital Group from Square Mile Capital.
The court filing provides a rare look at brokerage compensation for a deal of this size.
If a recapitalization is completed, Meridian would receive a brokerage fee of 3 percent of the maximum amount of the equity committed up to $25 million; 2.5 percent of the equity committed between $25 million and up to $50 million; 2 percent of the equity commitment between $50 million and $75 million; 1.5 percent between $75 million and $100 million; and 1 percent between $100 million and $150 million.
Meridian would also receive half a percent of the equity commitment greater than $150 million.
According to the motion before the judge, the firm would also get a fee if it assists All Year in financing. On a refinancing loan, Meridian’s fee would equal 80 basis points or 0.8 percent of the total. In the case of a workout, Meridian should be paid a fee equal to 30 basis points.
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Meridian is among the largest commercial debt and investment sales brokerages in New York. In 2020, it closed about $40 billion in financing with 250 different lenders, according to a court filing.
All Year, led by Goldman, became one Brooklyn’s largest landlords by tapping into cheap financing on the Israeli bond market. The company reached an agreement to prevent Goldman from appointing new board members, and decision-making was left to a chief restructuring officer and All Year’s board.
Meridian declined to comment. All Year’s chief restructuring officer did not immediately respond to a request to comment.