An adviser to Philadelphia Rittenhouse Developer LP, which owns and operates a 33-story luxury building in the heart of the city's downtown, blamed the company's bankruptcy filing on a receivership action started by the mortgage lender iStar Financial Inc.

Steven Shepsman, an executive managing director at New World Realty Advisors, said in an interview that last week's Chapter 11 petition was a protective move aimed at keeping iStar from placing the project in the hands of a receiver.

Such an outcome could be detrimental to the residents who currently occupy fewer than one-third of the condominium building's 135 units, as well as to pensioners who poured investments into the mezzanine lender, Delaware Valley Real Estate Investment Fund, Shepsman said.

But iStar, which initiated the receivership action in Philadelphia State Court, indicated it would not back down from efforts to preserve its interests.

"IStar intends to take all necessary action to protect its investment in this unique Philadelphia development," said Jason Fooks, an assistant vice president.

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