A U.S. bankruptcy court judge roundly rejected an HNA Group affiliate’s reorganization attempt involving a Loop skyscraper, handing SL Green a victory in the dispute between the two firms.
HNA, a Chinese conglomerate, wanted to transfer the 50-story property at 181 West Madison Street to a group of China-based subsidiaries. The HNA Group affiliate, which is also the owner of a 44-story Park Avenue skyscraper in New York, filed for bankruptcy last year.
HNA blamed SL Green, the property manager at 245 Park Avenue and New York’s largest office landlord, for the bankruptcy filing, saying the firm failed to secure a new anchor tenant at the property to replace Major League Baseball, whose lease expired on Oct. 31, 2021.
Attorneys for SL Green objected to HNA’s reorganization plan, arguing the proposed transfer of the Chicago property was part of a fraudulent conveyance scheme to thwart SL Green, which has been trying to collect on a $185 million judgment it won against HNA Group in July.
An attorney listed as the HNA affiliate’s representation in court records didn’t return a request for comment. HNA Group did not return a request for comment.
The judgment stemmed from an arbitrator’s finding that HNA breached a contract related to SL Green’s investment in 245 Park Avenue. SL Green acquired the property last month.
In the latest ruling, Judge Mary Walrath said she doubted whether HNA had proposed the transfer of the Chicago building in good faith and “could not in good conscience” approve it, adding that allowing the transfer would harm the SL Green affiliate seeking to collect on the previous judgment.
Matthew Stein, who argued the objection on behalf of SL Green, called HNA’s proposed reorganization “a blatant last-minute attempt by HNA to transfer assets without consideration to hinder SL Green’s collection efforts.”
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