Joshua Bruno, who operates five low-income apartment complexes in New Orleans where tenants are complaining of dire conditions, filed for bankruptcy Thursday on all the properties, just as an Orleans parish judge was on the case. point of ordering a âcustodianâ to manage them pending foreclosure.
The filings of five LLCs controlled by Bruno, president of Metro-Wide Apartments, are stopping these proceedings. Instead, Bruno will have time to come up with a reorganization plan for the resorts that tenants say deteriorated under his watch, before and after Hurricane Ida.
Joshua Bruno, the owner of several New Orleans apartment complexes where tenants and their advocates have long complained of unsanitary livingâ¦
What the deposits mean for the remaining tenants, many of whom receive federal rent subsidies, is unclear. Advocates for tenants have lobbied in recent months to find new homes for them, saying Bruno was reluctant to fix and left them stranded.
The properties are two large apartment complexes in Algiers, Oakmont Apartments and Cypress Park Apartments, as well as Forest Park Apartments, Liberty Park Apartments and Washington Place Apartments on the east bank. Together they comprise more than 450 units, many of which house government-subsidized tenants.
Bruno said bankruptcies provide “the best opportunity for properties to be rehabilitated in a timely manner.”
He blamed the stalled repairs on the fight against the foreclosure, which pitted him against the Federal National Mortgage Association, or Fannie Mae, and local advocates for low-income tenants.
Bruno claimed his businesses had lost millions due to the downturn in the pandemic. He also said that Fannie Mae tricked him into not paying for the tickets and that she reneged on the promised abstention. Fannie Mae rejected this claim.
âBy ending the costly and time-consuming litigation with Fannie Mae, we are empowered to focus again on serving our tenants and the community,â Bruno said via email. “The deposits also give us the opportunity to restructure our debt and recover from the financial challenges of the past two years.”
He said Chapter 11 filings will “ultimately benefit tenants as we hope repairs to properties can begin quickly.”
Hannah Adams, a staff attorney with Southeast Louisiana Legal Services, said the landlord “does not speak on behalf of the tenants of his properties. The tenants have spoken, and they don’t believe that Mr. Bruno keeping control is in their best interest.
But Adams said the bankruptcies, which she described as inevitable given the breakup, will mean that at least for now Bruno will remain in control. Instead of timely repairs, Adams said defenders moved in to help residents leave.
By far the largest unsecured creditor of the five properties is the New Orleans Sewerage & Water Board, which claims to owe approximately $1.8 million from the five properties. Bruno disputes that bill, saying the council charged him $1.2 million in incidental trash fees. The bulk of the bill, over $1 million, comes from Oakmont.
The Sewerage and Water Board is âaware of the situation at Oakmont Apartments and will not disrupt tenant services until there is a clear path from bankruptcy proceedings,â spokeswoman Grace said. Birch.
Oakmont on Gen. De Gaulle Drive, the largest of Bruno’s complexes, is now largely vacant. Plywood covers some windows; a handful of cars dot the lots. Residents still there complain of rats, sewer backups, water leaks and endemic mold in the 40-year-old complex, which has more than 300 units.
Tenant advocates estimate around a third of those flats are vacant, although residents say squatters have occupied some. Bruno declined to comment on the occupation.
“I have never seen anything so deplorable in all my years of life,” said Nina Desvignes, a federal Social Security retiree.
There remains a hole in her window from which “a bullet whistled past me and my grandchild” on November 18, she said. Its ceiling is collapsing, damaged by Hurricane Ida, when it ârained from all the fixtures. It rained through the walls.
Desvignes said people had come to inspect the damage, leaving blue spray paint behind and vowing to return with patches.
âThe mold is unbearable. It’s in a closet. You can smell midges, insects and bugs. I can barely breathe,â she said. âI would like to move, but I can’t afford it. I am at an impasse.
Bruno will have up to 18 months to work out a reorganization plan that could see him keep the properties, depending on negotiations with Fannie Mae and other bankrupt creditors, said Adam Stein-Sapir of Pioneer Funding Group, an investment fund. investment that redeems bankrupt debts. case.
Bruno could hope for an increase in occupancy and reach an agreement in bankruptcy court to restore his loans. It could also seek outside investors or sell the properties through the bankruptcy process, Stein-Sapir said.
“He’s taking this step because he sees value in it,” Stein-Sapir said. âOtherwise he would have just handed over the keys to Fannie Mae and wiped his hands clean and forfeited his capital.â
Fannie Mae offered last spring to seize Bruno’s properties and asked Orleans Parish Civil District Judge Nicole Sheppard to appoint an outside “custodian” to manage them. Bruno asked for an injunction.
Negotiations fell apart once Hurricane Ida hit, and tenants and advocates from the New Orleans Tenants’ Rights Assembly joined the legal fight.
Last month, Sheppard set January 3 as the deadline for Bruno and Fannie Mae to reach a deal before she goes ahead. Bruno also had to send a perforated list of essential repairs sought by tenants.
The judge’s deadline has passed with few repairs and no deal. Instead, Bruno and housing advocates filed duel motions for contempt of court.
This was during a Thursday hearing on Bruno’s contempt motion, alleging Fannie Mae refused to release insurance money for repairs, when he filed for bankruptcy. This took Sheppard out of the equation.