The apparent misappropriation of money from a troubled company run by slain Brooklyn businessman Menachem Stark went on much longer than originally believed, a bankruptcy trustee said Thursday.
During a Brooklyn bankruptcy court hearing, trustee Jonathan
L. Flaxer didn't specify how long he believed the alleged diversion took place
from the accounts of South Side House LLC but said it was for a
"protracted period of time" before Nov. 6, 2013, a date noted on the
company's bank statements provided to the court.
Allegations that money from the accounts of South Side was
misappropriated were first raised a week ago by German American Capital Corp, a
finance company with a claim in the bankruptcy proceeding.
South Side is a Williamsburg real estate company with an
interest in an area apartment building. Stark, 39, was a half owner of South
Side, along with partner Israel Perlmutter.
In court papers German American said more than $1.7 million
was taken out of the South Side account as "customer withdrawals" for
about two months ending Jan. 6.
Stark was abducted outside his Williamsburg office Jan. 2
and found dead the next day in a trash bin in Great Neck. Family friends said
he died of suffocation. An official cause of death has not been released.
South
Side filed for Chapter 11 protection in 2009, listing nearly $30 million in
debts, mostly mortgages.
Stark had also been saddled with a number of default
judgments and allegations that he was a slumlord.
Law enforcement officials
have said they are investigating Stark's former employees and contractors for
leads, as well the possibility he borrowed money from criminals. A van similar
to one used in the abduction was located by police but has not led to any
arrests, police said.
Flaxer acknowledged in court that $150,000 paid by South Side
to Brooklyn attorney Samuel Halberg had been returned to the company.
Halberg
said in a deposition that he had been paid the $150,000 in connection with the
purchase of a piece of Brooklyn real estate, according to a transcript of that
proceeding. Halberg declined to identify his client on the basis of
attorney-client privilege, the transcript showed.
David Carlebach, an attorney for Halberg, didn't return
calls or emails seeking comment.
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