Warren County Memories book 20 Under 40

Cefalu LLC files for bankruptcy

2010-11-08T19:06:00Z 2010-11-15T11:10:37Z Cefalu LLC files for bankruptcyBy BLAKE JONES, bjones@poststar.com Glens Falls Post-Star
November 08, 2010 7:06 pm  • 

GLENS FALLS -- One of Sophie Cefalu's many real estate investment groups filed for bankruptcy on Thursday.

SBC Properties LLC is seeking Chapter 11 protection, according to court documents.

Since early 2009, about a dozen Glens Falls properties owned by the group have fallen into foreclosure. And in recent months, the courts have ruled against SBC and started to schedule foreclosure auctions.

The group lost one property at 24 Broad St. in September; it was sold to recoup money for a Florida investor who held the mortgage.

The bankruptcy filing pauses any pending foreclosures as SBC tries to reorganize its finances in court.

In fact, a sale was stopped on Friday because of SBC's bankruptcy petition the day before.

Court-appointed referee Lea Everhart said she held a foreclosure auction for 14 New Pruyn St. at City Hall in the morning. A bid was accepted but was nullified later that day when Everhart learned of SBC's filing in U.S. Bankruptcy Court's Albany office.

It's not clear from the petition exactly how much SBC owes its creditors; the document only states the group has between $1 million and $10 million in liabilities.

Only $124,000 of that total is for unsecured claims, including unpaid bills to the IRS ($10,000), state Department of Taxation and Finance ($12,000), and National Grid ($77,000).

The majority of SBC's debt presumably comes from its secured claims, or mortgages on about a dozen properties the group still owns. Half of the addresses listed in the bankruptcy document are in foreclosure.

The mostly residential Glens Falls properties include: 2-4, 6-8, 7, 9-11 and 14 New Pruyn St.; 86, 99-101 and 91-95 South St.; 22 Broad St.; 12 Bacon St.; and 14 School St.

The group also owns 219 Main St. in Hudson Falls.

Chapter 11 generally involves reorganization, with the goal of reducing the debt load so the company can continue operating.

Sophie Cefalu did not return a call seeking comment on Monday. SBC's attorney in Schenectady, Opal Hinds, said via e-mail only that the Chapter 11 filing stops the pending foreclosure actions in Warren County.

In addition to managing SBC Properties, Cefalu is the manager for at least five other LLCs that are tied up in separate foreclosure lawsuits.

Cefalu's investor groups appeared on the Glens Falls scene about five years ago with the goal of revitalizing commercial and residential properties.

The efforts peaked with the conversion of the former St. Mary's convent into the Crandall Square Condominiums.

Cefalu's son, developer Charles Cefalu, handled real estate transactions and presented himself as the face of the groups to investors, public officials and media. He has blamed the economy for many of the foreclosures and denied any ongoing role with the groups.

Charles Cefalu's real estate company is the listing agency for many of the groups' properties, however.

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