New York developers Hotel 44th St. LLC and East 46th Street Development Co. have accused the Republic of Senegal of being a “deadbeat” in a federal complaint (see complaint filing after the jump). The developers claim that representatives from the Senegalese government had agreed to pay $27 million for a building at 227-235 East 44th Street between Second and Third avenues. But the representatives then allegedly began putting off the payment and making pledges that “the check is in the mail,” the complaint says, like a “notorious deadbeat.” The plaintiffs, represented by Neal Barlia of Dickstein Shapiro, claim that they have suffered $15 million in damages as a result of Senegal’s bad faith. “Although the check may have been in the mail,” the complaint says, “it never arrived, and Senegal has been unable to fund the purchase price.” [Courthouse News Service]
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From the February issue: During the last major real estate
downturn, in the early 1990s, New York developers frequently used
bankruptcy filings to shield troubled assets from foreclosure. This
time around, however, that haven may not be available. Changes to
federal bankruptcy laws and a recent court ruling in New Jersey could
have a major impact on how the collapses of the commercial and
multi-family real estate markets play out in 2009. Mark Fawer, a
partner in the real estate group of law firm Dickstein Shapiro, said
developers have often used bankruptcy filings to delay the repayment of
delinquent loans or to extract more favorable terms from a lender to
prevent a property from going into foreclosure. “There are those
borrowers who would use bankruptcy as just another delaying technique,
as a last resort before a foreclosure sale takes place,” said Fawer.
“There are others that would look to it as a tool to reorganize.” [more]