Alternatives to foreclosure, such as a sale during a receivership, are one option that banks, creditors and lenders may pursue in order to avoid the associated costs, disposition delays and potential devaluation of an asset. In particular, non-performing lodging loans and hotels in default may be a prime choice by financial institutions for these reasons. But, will the courts agree? Read how two different jurisdictions ruled on other income producing real estate – one in California that said “no” and another that said “yes” in Arizona: In the dispute Wachovia Bank, National Association vs. Downtown Sunnyvale Residential, LLC the Santa Clara County Superior Court found that the protections afforded by California foreclosure laws preclude a sale of property by rents and profits receivers. The full article can read in the 2011 Summer Issue of the Receivership News on the ruling of this receivership sale as alternatives to foreclosure. Alternatively, the Maricopa County Superior Court ordered the Receiver to sell seven Arizona apartment complexes, over the Borrower’s objections and without requiring a foreclosure to occur first in the case of LaSalle Bank National Association et al. v. Phoenix Kingdom I, LLC, etc. Read more on the court approved receiver action and subsequent assets sale in the 2011 Spring Issue of the same publication. If you are looking at alternatives to bankruptcy, such as a hotel receiver to oversee disposition of lodging assets, consult our blogs to learn more. Are you an attorney or legal counsel for a bank, creditor or lender that attempted to get court approval for a receivership sale as alternatives to foreclosure but failed to do so? Please share the reasons it was not successful. Also, feel free to post similar cases here involving the sale of assets using a receiver and your commentary that will benefit our readers.
