Jeffrey Simpson’s Bankruptcy Filing Leads to Chaos

Jeff Simpson is on a warpath.

After being sidelined from his New York development firm, Arch Companies, Simpson has been battling his former partner, his largest investor, The Real Deal, and, most recently, New York Justice Joel Cohen.

But Simpson’s latest battle has higher stakes. Simpson’s former partner, Jared Chassen, now seeks to hold him in criminal contempt, which comes with possible jail time.

Chassen was enraged by Simpson’s recent move to put JJ Arch, a company once controlled by them both, into bankruptcy. JJ Arch previously had a controlling stake in Arch Companies and controls other real estate co-owned by Simpson and Chassen.

In his filing, Simpson claims he is the sole owner of JJ Arch and that Chassen resigned last summer.

But Chassen’s attorney called those claims perjurious. In a letter to the court, Chassen’s attorney said Judge Cohen — who is presiding over their dispute in state court — ordered the two to remain members of JJ Arch.

“The (bankruptcy) filing of this case is an unauthorized, bad faith filing that wholly disregards the JJ Arch LLC operating agreement and defies and disobeys numerous court orders,” Chassen’s attorney wrote in the complaint.

Simpson’s bankruptcy attorney, Scott Griffin, declined to comment. Simpson also declined to comment.

Simpson’s bankruptcy filing threatens a number of properties that Chassen and Simpson co-own, including a property in the Hamptons, an Upper East Side townhouse, and a nine-unit new condo in Williamsburg. It could also stall Arch’s deals. Simpson’s move into bankruptcy appears to be his latest shot back at Oak and Chassen after a string of losses in state court.

Simpson founded Arch in 2017, amassing an enviable $1 billion portfolio of properties across New York City and around the country. Trouble started around 2022 when the Federal Reserve raised interest rates, sending Arch’s projects into distress.

Simpson, however, blamed the firm’s main investor, Oak, for its problems. He claimed that Oak failed to honor its capital calls, which led to shortfalls. Oak, led by Kevin and Michael Wiener, allege Simpson’s erratic behavior and incessant demands for money, gave them pause about continuing to cut checks.

In an affidavit, Michael Wiener pointed to one incident which left him particularly worried. During a car ride in the spring of 2023, Simpson allegedly became so irate he jumped out of the moving car and chased it to try to slam the door. Simpson, realizing he left his phone in the car, tried to get back into the moving vehicle while continuing to yell. Simpson disputes this account.

Things only got worse at Arch when Simpson attempted to fire his partner, Chassen, last summer. The next day, Chassen tried to fire Simpson and block access to his bank accounts. Simpson, with his then attorney Adam Leitman Bailey, rushed to court to return him to Arch. Judge Cohen wanted Simpson and Chassen to work together. That didn’t happen. Instead, Simpson fired Chassen again. The judge restored Chassen to the firm, but called the dispute “frankly, childish.”

Arch spiraled into chaos when Simpson furloughed all of its employees. Oak then obtained a court order allowing it to manage Arch in the short-term. It moved into the office Nov. 6 and brought back the furloughed employees. That month, Simpson attempted to show up in Arch’s office without Oak’s permission, leading to a dramatic scene in which police were called.

Cohen had seen enough.

“I am left with an abiding sense that whatever Mr. Simpson’s talents are as a real estate business person, this business is broken at the moment,” the judge said at one hearing. “It was broken on his watch.”

He removed Simpson and made Oak the sole manager of Arch until the litigation ended, with the caveat that Simpson or Chassen needed to sign off on important decisions. Simpson is further prohibited from interfering with the company under the order.

But Simpson has not backed down. In a rare move, he recently assailed the judge presiding over the case. In February, Simpson sent a letter to a New York administrative judge, claiming that Cohen has been impressed with Oak’s attorneys from large law firms and “that is the guiding force behind the court process rather than merits.”

“He (Cohen) has blocked bankruptcy, stripped me of my rights by changing agreements without the right to do that, ” Simpson said.

He added, “There has not been a way to defend myself properly and it seems that Cohen has unfairly (or improperly) rendered a decision about my character and business without cross examination, trial, or evidentiary hearing.”

Simpson, in an animated email, also went after TRD for its reporting on the litigation.

“Just because a judge has made certain commentary or observations, it doesn’t mean it is correct, or that is not appealable, or it warrants you taking a picture of a boot next to my face and attacking my character!” Simpson wrote in a recent email to TRD.