North Port FL: Specified Tenant Bankruptcy
PROPERTY SITUATION
A major tenant (super regional fitness center) went into bankruptcy at the center and Servicer advised Borrower that a cash sweep had been triggered and that Borrower would be required to open a “lockbox” account at a bank selected by Servicer. Borrower attempted to communicate with Servicer to explain that the lockbox and cash sweep would not be necessary. Servicer continued to insist that a lockbox be opened and that the cash sweep commence.
BCA RESOLUTION
Borrower retained BCA to negotiate on their behalf with Servicer. BCA reviewed the loan documents and the documentation related to the tenant bankruptcy. First, BCA advised Servicer, that if a lockbox was going to be needed, that per the loan documents, Borrower had the right to select the lockbox bank provided the bank meets certain criteria. Second, BCA provided Servicer with a summary of the status of the bankruptcy proceeding and supporting documentation. The summary explained that tenant and all of their assets had been purchased, the lease in the center was to be assumed and that the bankruptcy court was in the process of finalizing the purchase. We requested that Servicer waive the cash sweep and establishment of the lock box for three months to allow the court to finalize the purchase. BCA was able to engage Servicer and obtain a favorable outcome in an expedited time frame.
LOCATION:
North Port, FLPROPERTY:
Unanchored RetailProperty Details
PROPERTY TYPE | Unanchored Retail |
CITY | Northport |
STATE | FL |
LOAN AMOUNT | $5.7M |
MASTER SERVICER | Midland |
SPECIAL SERVICER | N/A |
DATE COMPLETED | Feb 2021 |