In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides expert insight on the bankruptcy sale of a historic property.
Article Link: https://commercialobserver.com/2023/07/former-bowery-savings-bank-to-sell-for-26m-after-bankruptcy/
Summary
The former Bowery Savings Bank, a historic building in Chinatown, New York, is set to be sold for $26 million following the bankruptcy of its owner, 130 Bowery Acquisition. The sale is pending approval by a judge and is expected to be enough to cover the outstanding debt with Wells Fargo. The building, which has been used for upscale events by Capitale, was previously purchased by Michael and David Marvisi in 2017 for $33 million. Despite attempts to auction the property for higher amounts in the past, the Marvisis defaulted on a $12 million loan, leading to the current bankruptcy sale to SC Holdings, a private equity firm.
- The former Bowery Savings Bank is being sold for $26 million after the owner’s bankruptcy.
- The sale is expected to cover the debt owed to Wells Fargo, avoiding an auction process.
- Capitale, the building’s tenant, will switch to a temporary licensing agreement post-sale.
Q&A
What are the implications of a bankruptcy sale for the property’s tenant?
The tenant, in this case, Capitale, will lose its lease immediately after the sale. However, a temporary licensing agreement will allow it to continue operating until the end of the year to honor previously booked events.
How does a private sale in bankruptcy differ from an auction?
A private sale, like the one between 130 Bowery Acquisition and SC Holdings, allows the seller to bypass the auction process, which can be beneficial in certain situations. For more information on bankruptcy sales, click here.
What factors contribute to a creditor’s decision to sell a bankruptcy claim?
Creditors may choose to sell their bankruptcy claims to avoid the uncertainty and lengthy process of bankruptcy proceedings. They may also sell if they anticipate a low recovery rate on their claims, as immediate cash can be more valuable. For a detailed explanation, visit this link.
