Mark Nussbaum’s former legislation corporations filed for Chapter 11 chapter months after the as soon as outstanding actual property lawyer admitted to diverting a whole lot of thousands and thousands of {dollars} to Brooklyn investor Mendel Steiner.
A chief restructuring officer put Nussbaum Lowinger and Mark J Nussbaum & Associates into chapter 11 in federal courtroom in New York’s Southern District on Thursday, halting an ongoing different to chapter proceedings in New York state courtroom, generally known as an ABC. A lawyer dealing with the ABC has already mentioned it’s planning to contest the chapter.
Nussbaum’s former legislation corporations listed between $100 million and $500 million in liabilities and $10 million to $50 million in property, in line with the chapter submitting.
Nussbaum Lowinger, Nussbaum’s major legislation agency, listed its largest collectors as Elizabeth Capital Success LLC with a $156.3 million declare and Blueberry Funding, with a $58.7 million declare. Murray Huberfeld, co-founder of the now-defunct hedge fund Platinum Companions, and his entities are owed $17 million, in line with chapter filings.
Bloomberg Regulation first reported information of the chapter.
Nussbaum Lowinger’s chapter provides one other layer to the authorized mess surrounding Mark Nussbaum.
The disgraced lawyer is dealing with felony expenses from the Manhattan District Legal professional’s workplace for grand larceny for allegedly diverting $15 million in shopper escrow cash. Nussbaum has pleaded not responsible. Along with felony expenses, Nussbaum is dealing with a litany of civil lawsuits, to which a chapter would halt. (Regardless of his not responsible plea in felony courtroom, Nussbaum admitted to funneling funds throughout these civil proceedings.) Notably, a chapter would additionally pause Nussbaum’s ABC, an alternative choice to chapter courtroom proceedings.
Nussbaum appointed a lawyer, generally known as an assignee, to start the ABC proceedings in June 2025. The lawyer, Sheldon Eisenberger, has tried to gather on Nussbaum’s legislation agency’s excellent money owed to repay its collectors. Throughout that course of, Nussbaum revealed extra perception into how his legislation agency bumped into bother. In a single courtroom submitting, Nussbaum admitted to diverting $336 million from his legislation agency’s collectors to Steiner between 2022 and 2025.
However Nussbaum Lowinger’s new chief restructuring officer, Ephraim Diamond, claims the ABC has made minimal progress and few distributions to collectors. A chapter courtroom would expedite and centralize that course of.
Eisenberger already introduced plans to contest the chapter. After the chapter was filed, Eisenberger despatched a letter to collectors alerting them that “Mark Nussbaum brought about the unauthorized submitting” of the chapter petitions.
“The petitions are with out foundation, and we are going to search their dismissal together with all different acceptable reduction, together with authorized charges, prices and sanction,” the letter mentioned, which was filed as a part of the ABC proceedings in NY state courtroom.
Nussbaum used his agency’s escrow accounts as a option to facilitate short-term loans to actual property dealmakers. He turned well-known for a transfer known as “present capital,” the place Nussbaum would supply a dealmaker with the mandatory funds to indicate one other social gathering the dealmaker had the funds to shut on the deal.
However Nussbaum ran right into a deficit in 2024, with a lot of the cash going to Steiner. In January 2025, a nursing residence investor named Jacob Sod filed a lawsuit towards Nussbaum and his legislation corporations, alleging that they had refused to return him $15 million of escrow funds. Steiner died by suicide in a Manhattan lodge room days later. Days after that Nussbaum shut down Nussbaum Lowinger.
Learn extra
Mark Nussbaum used escrow funds for “hush money,” lawsuit alleges
Creditors seek at least $400M from Mark Nussbaum’s former law firms
Mark Nussbaum begins bankruptcy alternative to pay off escrow clients
How Mark Nussbaum went from transactional lawyer to escrow-funded dealmaker
