Green Tab D001 - Recovery Band Calculation¶
GUARDRAIL: GREEN — ENFORCEMENT & LIENS
Asset recovery, lien priority, and collection strategy. No underlying damages calculations, no liability analysis.
0. Purpose & Scope¶
This tab aggregates asset data from B001 (Block 2512 equity) and B002 (mortgage receivables and secondary assets) into facts-only collection capacity bands. It applies conservative haircuts for transaction costs, delays, and collection probability to produce realistic recovery ceilings.
D001 answers one question: What is the realistic range of collection capacity available from documented APC assets?
This document does NOT: - Recommend what amount to demand or accept - Propose enforcement sequence or tactics - Apply punitive multipliers or damages ratios - Frame negotiation strategy or leverage positioning
Those topics belong in Purple Vol 08 (strategy) and Pink Vol 03 (multipliers).
POSTURE NOTE: Green Volume 09 presents asset and equity facts only. Settlement strategy, collection posture, and leverage deployment live in Purple Vol 08. Green provides the factual foundation for asset recovery without advocacy framing.
Cross-References: - Loan universe: Grey B001 (ACRIS Spine) - Asset mapping: Grey C002 (Collateral Map) - Lien priority: Green C001 (NY RPL, CPLR Article 52) - Strategy: Purple Vol 08 (Settlement Posture)
1. CRITICAL: Two-Tier Valuation Framework¶
1.1 Valuation Methodology Note¶
Per Green B001 v1.2, this document presents two tiers of recovery capacity:
| Tier | B001 Basis | Property Value | Equity | D001 Status |
|---|---|---|---|---|
| Tier A | ACRIS/LTV inference | $18M-$32M | $13.9M-$27.9M | Documented FLOOR |
| Tier B | Comparable sales (Lots 1+72) | $44.49M-$57.07M | $40.39M-$52.97M | Estimated market |
Why Two Tiers?
The original ACRIS-based methodology (Tier A) used mortgage amounts to infer property value via assumed LTV ratios (65-80%). This systematically understates value for conservatively-financed properties. A $4.1M mortgage on a $50M building is only 8% LTV - the loan amount provides no meaningful signal about actual value.
Tier B uses verified building area and recent comparable sales to estimate market value. As of B001 v1.2, Tier B is split into two components: - Tier B-1 (Lot 1): 112,105 sq ft mixed-use at $391-$501/SF - Tier B-2 (Lot 72): 2,214 sq ft warehouse valued via land-value approach at $300-$400/SF
Both tiers are presented below. Tier A recovery bands are documented minimum floors. Tier B recovery bands reflect likely market-based capacity. Independent appraisal is REQUIRED before litigation deployment.
2. Input Summary¶
D001 draws from two preceding Green tabs:
2.1 Tier 1: Block 2512 Equity (from B001 v1.2)¶
Collateral Definition: Block 2512 = Lots 1 & 72, both encumbered by mortgage L-2024-02 ($4.1M)
Tier A (ACRIS Floor):
| Scenario | Property Value | Less Mortgage | Gross Equity |
|---|---|---|---|
| Conservative | $18M | $4.1M | $13.9M |
| Moderate | $25M | $4.1M | $20.9M |
| Optimistic | $32M | $4.1M | $27.9M |
Methodology: LTV inference implicitly covers entire collateral package
Tier B (Comp-Based Estimate - Lots 1 + 72):
| Component | Low | Mid | High |
|---|---|---|---|
| Lot 1 (230 Franklin) - 112,105 sf @ $391-$501/sf | $43.83M | $46.08M | $56.18M |
| Lot 72 (117 Green) - 2,214 sf @ $300-$400/sf land | $0.66M | $0.77M | $0.89M |
| Total Property Value | $44.49M | $46.85M | $57.07M |
| Less: Mortgage | ($4.1M) | ($4.1M) | ($4.1M) |
| Gross Equity | $40.39M | $42.75M | $52.97M |
Current Senior Position: Customers Bank (L-2024-02, $4,100,000 principal)
Lot 72 Sensitivity Note: Lot 72 represents ~1.5% of total Tier B value. The overall capacity bands are not materially sensitive to Lot 72 valuation estimates.
2.2 Tier 2: Mortgage Receivables (from B002)¶
| Property | Borough | Principal | Status Flag |
|---|---|---|---|
| Block 889, Lot 83 | Queens | $80,000 | Likely outstanding |
| Block 16040, Lot 6 | Queens | $216,000 | Likely outstanding |
| Block 2887 (Cruger Ave) | Bronx | $350,000 | Status unknown |
| Block 9778, Lot 134 | Queens | $330,000 | Status unknown |
| Total Nominal | $976,000 |
Collection Uncertainty: Two receivables flagged as "likely outstanding" (Queens 889, 16040); two flagged as "status unknown" (Bronx 2887, Queens 9778). Haircuts in Section 3 account for verification risk and collection probability.
2.3 Tier 3: Business/UCC Assets (from B002)¶
| Category | Description | Estimated Range |
|---|---|---|
| Equipment & Fixtures | Office/operational equipment at Brooklyn HQ | $100K - $300K |
| Inventory / Goods | Business stock and materials | $50K - $200K |
| Additional Receivables | Trade receivables beyond $976K portfolio | $50K - $100K |
| Total Tier 3 Estimate | $200K - $600K |
Estimation Basis: UCC filing history (1992-2024) documents equipment and inventory pledged as collateral. Ranges reflect typical business asset recovery rates for operating companies.
3. Haircut Methodology¶
Collection capacity is not equal to gross asset value. This section documents the discount factors applied to convert nominal values into realistic recovery estimates.
3.1 Tier 1 Haircuts (Real Estate)¶
| Factor | Conservative | Moderate | Optimistic |
|---|---|---|---|
| Foreclosure discount | 15% | 10% | 5% |
| Transaction costs (legal, broker, title) | 8% | 6% | 4% |
| Time value / delay | 7% | 4% | 1% |
| Combined Haircut | 30% | 20% | 10% |
Rationale: - Conservative (30%): Assumes contested foreclosure, extended timeline, distressed sale conditions - Moderate (20%): Assumes standard foreclosure process, normal market conditions - Optimistic (10%): Assumes cooperative sale, favorable market, minimal delays
3.2 Tier 2 Haircuts (Receivables)¶
| Factor | Conservative | Moderate | Optimistic |
|---|---|---|---|
| Status verification discount | 20% | 10% | 5% |
| Collection probability | 20% | 15% | 5% |
| Legal/garnishment costs | 10% | 5% | 0% |
| Combined Haircut | 50% | 30% | 10% |
Rationale: - Two of four receivables have unknown status (may be satisfied, assigned, or impaired) - Collection requires legal process (garnishment, assignment order) - Borrower solvency and cooperation affect actual recovery
3.3 Tier 3 Haircuts (Business/UCC Assets)¶
| Factor | Conservative | Moderate | Optimistic |
|---|---|---|---|
| Valuation uncertainty | 25% | 15% | 5% |
| Liquidation discount | 30% | 20% | 10% |
| Priority/competing claims | 10% | 5% | 0% |
| Combined Haircut | 65% | 40% | 15% |
Rationale: - No independent appraisal of equipment/inventory - Business assets typically liquidate at fraction of book value - May be subject to prior security interests or operational necessity claims
4. Recovery Band Calculation¶
4.1 TIER A: Recovery Bands (ACRIS-Derived Floor)¶
Gross Asset Values:
| Tier | Asset Class | Low Value | Mid Value | High Value |
|---|---|---|---|---|
| 1 | Block 2512 Equity | $13.9M | $20.9M | $27.9M |
| 2 | Mortgage Receivables | $976K | $976K | $976K |
| 3 | Business/UCC Assets | $200K | $400K | $600K |
| Gross Total | $15.08M | $22.28M | $29.48M |
Haircut Application:
Conservative Scenario:
| Tier | Gross Value | Haircut | Net Value |
|---|---|---|---|
| 1 | $13.9M | 30% | $9.73M |
| 2 | $976K | 50% | $488K |
| 3 | $200K | 65% | $70K |
| Total | $15.08M | $10.29M |
Moderate Scenario:
| Tier | Gross Value | Haircut | Net Value |
|---|---|---|---|
| 1 | $20.9M | 20% | $16.72M |
| 2 | $976K | 30% | $683K |
| 3 | $400K | 40% | $240K |
| Total | $22.28M | $17.64M |
Optimistic Scenario:
| Tier | Gross Value | Haircut | Net Value |
|---|---|---|---|
| 1 | $27.9M | 10% | $25.11M |
| 2 | $976K | 10% | $878K |
| 3 | $600K | 15% | $510K |
| Total | $29.48M | $26.50M |
Tier A Recovery Summary (DOCUMENTED FLOOR):
| Scenario | Tier 1 Net | Tier 2 Net | Tier 3 Net | Total Capacity | Status |
|---|---|---|---|---|---|
| Conservative | $9.73M | $0.49M | $0.07M | $10.29M | FLOOR |
| Moderate | $16.72M | $0.68M | $0.24M | $17.64M | FLOOR |
| Optimistic | $25.11M | $0.88M | $0.51M | $26.50M | FLOOR |
4.2 TIER B: Recovery Bands (Comp-Based Estimate - Lots 1 + 72)¶
Gross Asset Values:
| Tier | Asset Class | Low Value | Mid Value | High Value |
|---|---|---|---|---|
| 1 | Block 2512 Equity (Lots 1+72) | $40.39M | $42.75M | $52.97M |
| 2 | Mortgage Receivables | $976K | $976K | $976K |
| 3 | Business/UCC Assets | $200K | $400K | $600K |
| Gross Total | $41.57M | $44.13M | $54.55M |
Tier 1 Breakdown (Block 2512):
| Component | Low | Mid | High |
|---|---|---|---|
| Lot 1 equity (230 Franklin) | $39.73M | $41.98M | $52.08M |
| Lot 72 equity (117 Green) | $0.66M | $0.77M | $0.89M |
| Total Tier 1 | $40.39M | $42.75M | $52.97M |
Haircut Application:
Conservative Scenario:
| Tier | Gross Value | Haircut | Net Value |
|---|---|---|---|
| 1 | $40.39M | 30% | $28.27M |
| 2 | $976K | 50% | $488K |
| 3 | $200K | 65% | $70K |
| Total | $41.57M | $28.83M |
Moderate Scenario:
| Tier | Gross Value | Haircut | Net Value |
|---|---|---|---|
| 1 | $42.75M | 20% | $34.20M |
| 2 | $976K | 30% | $683K |
| 3 | $400K | 40% | $240K |
| Total | $44.13M | $35.12M |
Optimistic Scenario:
| Tier | Gross Value | Haircut | Net Value |
|---|---|---|---|
| 1 | $52.97M | 10% | $47.67M |
| 2 | $976K | 10% | $878K |
| 3 | $600K | 15% | $510K |
| Total | $54.55M | $49.06M |
Tier B Recovery Summary (ESTIMATED MARKET):
| Scenario | Tier 1 Net | Tier 2 Net | Tier 3 Net | Total Capacity | Status |
|---|---|---|---|---|---|
| Conservative | $28.27M | $0.49M | $0.07M | $28.83M | Estimated |
| Moderate | $34.20M | $0.68M | $0.24M | $35.12M | Estimated |
| Optimistic | $47.67M | $0.88M | $0.51M | $49.06M | Estimated |
4.3 Combined Recovery Summary¶
| Tier | Scenario | Total Capacity | Status |
|---|---|---|---|
| A (ACRIS Floor) | Conservative | $10.29M | Documented minimum |
| A (ACRIS Floor) | Moderate | $17.64M | Documented minimum |
| A (ACRIS Floor) | Optimistic | $26.50M | Documented minimum |
| B (Comp-Based) | Conservative | $28.83M | Pending appraisal |
| B (Comp-Based) | Moderate | $35.12M | Pending appraisal |
| B (Comp-Based) | Optimistic | $49.06M | Pending appraisal |
Key Interpretation: - Tier A ($10.3M - $26.5M): Documented minimum floor. Actual capacity is almost certainly higher. - Tier B ($28.8M - $49.1M): Estimated market capacity based on comparable sales. Requires independent appraisal for litigation use. - Tier 1 dominance: Block 2512 real estate represents 96-97% of total capacity across all scenarios. - Lot 72 contribution: ~1.5% of Tier B total; overall bands not materially sensitive to Lot 72 estimates.
5. Constraints & Limitations¶
5.1 Priority Constraints (See C001)¶
Recovery bands assume judgment creditor can access these assets. Actual recovery depends on:
- Lien priority position (senior mortgages satisfied first)
- Municipal lien priority (NYC tax liens, OATH remediation liens)
- Judgment lien recording date relative to other claims
- Homestead or other exemption claims (unlikely for commercial property)
Green C001 documents the applicable priority rules under NY RPL and CPLR Article 52.
5.2 Verification Requirements¶
Before relying on these bands, counsel should verify:
| Item | Current Status | Verification Needed | Priority |
|---|---|---|---|
| Property valuation | Tier A documented; Tier B estimated | Independent appraisal | CRITICAL |
| Block 2512 mortgage balance | L-2024-02: $4.1M (per ACRIS) | Updated payoff statement | High |
| Lot 72 characteristics | Land-value estimate | Site inspection | Medium |
| Receivables status | 2/4 unknown | Updated ACRIS pulls | Medium |
| UCC asset values | Estimated | Physical inventory/appraisal | Low |
5.3 Lot 72 Sensitivity¶
Lot 72 (117 Green Street) represents approximately 1.5% of total Tier B value. Because this is a small fraction of total capacity: - Even a 30-40% estimation error in Lot 72 valuation has minimal impact on total recovery bands - The two-component Tier B structure provides transparency without material sensitivity to warehouse valuation assumptions
5.4 What D001 Does NOT Provide¶
| Topic | Location |
|---|---|
| Settlement targets or demand amounts | Purple Vol 08 |
| Enforcement sequence recommendations | Purple Vol 08 |
| Multiplier calculations (punitive, treble) | Pink Vol 03 |
| Damages computation (Blue/Red/Brown totals) | Respective volumes |
| Criminal exposure leverage | Grey Vol 11 |
6. Cross-Volume Integration¶
6.1 How Other Volumes Use D001¶
| Volume | Usage |
|---|---|
| Purple Vol 08 | D001 provides ceiling for settlement posture modeling |
| Pink Vol 03 | D001 capacity bands inform whether punitive awards are collectible |
| Grey Vol 11 | D001 shows what assets secure the loan stack analyzed in Grey |
| Brown Vol 04 | D001 confirms capacity to satisfy rent restitution claims |
6.2 H-Series Integration (Purple Vol 08)¶
Per Purple Binder Control v1.7, H-Series documents cite D001 as the authoritative source for recovery capacity:
- H000: References D001 for capacity framework
- H001: Uses D001 Tier 1 (Block 2512) bands for collection sequence planning
- H002: Uses D001 Tier 2/3 bands for receivables and UCC attachment strategy
Guardrail: H-Series cites D001 exactly; it does not recompute or modify capacity figures.
Note: H-Series v1.1 cites Tier A (ACRIS floor) values, which are unchanged in D001 v1.2. H-Series refresh is not required unless Tier B numbers are incorporated into enforcement planning.
6.3 Explicit Pointer to Strategy¶
How these recovery bands are used for settlement posture, enforcement sequence, or leverage deployment is addressed in Purple Vol 08.
Green Vol 09 documents what exists. Purple Vol 08 addresses what to do about it.
7. Sensitivity Analysis¶
7.1 Tier 1 Dominance¶
Because Tier 1 (Block 2512) represents 96-97% of recovery capacity, the primary sensitivity is to:
- Property valuation: The difference between Tier A and Tier B is entirely driven by property value methodology
- Mortgage balance: Each $1M reduction in senior debt increases equity dollar-for-dollar
- Haircut assumptions: A 10-point change in Tier 1 haircut shifts total capacity by $4.0M - $5.3M depending on scenario
7.2 Tier A vs Tier B Impact¶
| Metric | Tier A | Tier B | Difference |
|---|---|---|---|
| Conservative capacity | $10.29M | $28.83M | +$18.5M (+180%) |
| Moderate capacity | $17.64M | $35.12M | +$17.5M (+99%) |
| Optimistic capacity | $26.50M | $49.06M | +$22.6M (+85%) |
Interpretation: If Tier B property values are accurate (pending appraisal), actual collection capacity is approximately 2-3x higher than Tier A floors suggest.
7.3 Tier 2/3 Materiality¶
Tier 2 and Tier 3 together contribute only $0.5M - $1.4M across scenarios. Changes to receivables status or UCC asset values have limited impact on total recovery capacity.
7.4 Lot 72 Materiality¶
Lot 72 contributes $0.46M - $0.80M net (after haircuts) to Tier B capacity: - Conservative: $0.66M × 0.70 = $0.46M - Moderate: $0.77M × 0.80 = $0.62M - Optimistic: $0.89M × 0.90 = $0.80M
This is approximately 1.5-1.6% of total Tier B recovery. The two-part Tier B structure documents Lot 72 properly without creating material sensitivity to warehouse valuation assumptions.
8. Guardrails Recap¶
For D001:
- Two-tier capacity bands - Tier A (documented floor) and Tier B (estimated market)
- Tier B split into Lot 1 + Lot 72 - Separate methodologies for mixed-use vs warehouse
- No settlement targets - "What to demand" lives in Purple
- No multipliers - Punitive ratios live in Pink; D001 uses only documented/estimated asset values
- No strategy recommendations - "What to do" belongs in Purple
- No criminal/fraud framing - Exposure analysis lives in Grey/Red-OATH
- Source-bracketed - Every input traceable to B001 v1.2, B002, or underlying ACRIS/UCC records
- Explicit pointer to Purple for strategy
- Independent appraisal REQUIRED - Tier B bands require verification before litigation use
- Lot 72 sensitivity noted - ~1.5% of Tier B; not materially sensitive
END — Green Tab D001 - Recovery Band Calculation v1.3