Real estate lenders and borrowers everywhere are trying to figure out what to do with properties that are either sitting vacant or underperforming pre-pandemic expectations. In New York, a number of mezzanine foreclosures have been pursued with varying degrees of success when challenged in court. Some lenders have been shopping their loans, mostly at discounts to par that are not large enough to create substantial deal flow in the marketplace.

The recent decision of the Bankruptcy Court for the Southern District of New York in In re AAGS Holdings LLC, Case No. 19-13029 (SMB) (Bankr. D. Del. Nov. 12, 2019), underscores the ability of debtors — and specifically, for purposes of this Client Alert, parties to real property purchase contracts — to take advantage of the Bankruptcy Code’s 60-day tolling period to get more time to close on a purchase despite a “time of the essence” ("TOE") closing deadline.

On Jan. 17, the U.S. Court of Appeals for the Second Circuit vacated the decision of the District Court for the Southern District of New York in Marblegate Asset Management, LLC v.

A lender cannot rely on its subjective intent in claiming that an otherwise properly filed UCC termination is ineffective, according to a recent decision by the United States Court of Appeals for the Second Circuit. Put another way, if a lender authorizes a termination statement, the termination is valid upon filing such UCC-3 even if the authorization was mistakenly given. While this result is not surprising, it does put lenders (and their counsel) on notice to be diligent in reviewing and authorizing the filing of UCC termination statements.