By Akiko Matsuda

The U.S. Justice Department's bankruptcy watchdog has requested Judge Robert Drain of the U.S. Bankruptcy Court of New York in White Plains to appoint a chapter 11 trustee for the bankrupt owner of the Williamsburg Hotel in Brooklyn, N.Y.

An appointment of a chapter 11 trustee would mean the developers behind the 147-key hotel, Toby Moskovits and Michael Lichtenstein, would lose their control over the property, which they brought under chapter 11 in February 2021 to avoid foreclosure.

The Justice Department's request late Thursday follows a recent court filing from the hotel's secured mortgage lender, Benefit Street Partners LLC, which also petitioned Judge Drain to appoint a chapter 11 trustee to oversee the hotel owner entity, 96 Wythe Acquisition LLC.

Write to Akiko Matsuda at

(END) Dow Jones Newswires

04-01-22 1411ET