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Thompson & Knight Client Featured in New York Law Journal on Judicial Foreclosure Sales Case

“893 4th Ave. Lofts LLC v. 5AIF Nutmeg LLC”

Plaintiff sought to enjoin defendant from engaging in a UCC sale of the member and equity interest of 893 4th Avenue Lofts or taking actions to effectuate the sale. Plaintiff borrowed money from defendants to fund a construction project and Uhr sighed a pledge and security agreement providing the security for the loan would be an interest in 893. Plaintiff failed to make a timely March 2020 payment constituting a default and defendants sought to exercise their right to conduct a UCC sale to sell the secured interests perfected in the loan agreement. Plaintiff argued all such proceedings were stayed during the COVID-19 pandemic. The court found plaintiff failed to satisfy that it had a likelihood of success on the merits, thus, could not secure an injunction on those facts. Also, it found courts have held that an executive order did not include UCC sales which were not judicial proceedings, as plaintiff would argue, hence, concluded there was no basis upon which to stay the UCC sales contemplated in this action. Thus, the court denied the motion seeking a preliminary injunction and the UCC sales may take place, but no sooner than 45 days from the date of the decision.