Let me count the ways – it’s faster, much faster. A bankruptcy judge can get a single asset real estate matter resolved within 6 to 9 months fairly easily. Since the budge cuts affecting State courts, we’d be ready to file a motion for summary judgment at the 6 month period and then wait 3 to 5 months for a decision by the judge.
See our recent matter for a hotel on the upper east side of Manhattan in Madison 92nd Street Associates, LLC v. RLJ Lodging Acquisitions, LLC, an affiliate of RLJ Lodging Trust.
The law is consistent and practical. State court decisions at the lower court level are nowhere as consistent in application of the law. The overburdened appellate courts struggle with the flood of cases filed and the decisions are often cryptic.
The threat of the appointment of a bankruptcy trustee is often enough to get the parties talking and into a more practical settlement frame of mind. In state Court, the receiver process is fraught with complications.
The sale process through a bankruptcy court supervised process is much smoother and more professional. No standing on the court house steps.
In the last generation of real estate crash lenders emerged thinking bankruptcy was a bad thing and now include a bankruptcy filing as a bad act under non-recourse carve out guarantees. Perhaps it’s time to turn the tables. Perhaps it’s time that the carve out guarantees include a provision absolving all personal liability after the filing of a consensual bankruptcy within 120 days of a default?
PartnerTom represents owners, operators and developers in the acquisition, financing, development, ground leasing, and sale of significant properties. His experience includes office towers, commercial condominiums, industrial ...