Y. David Scharf on Potential Swell of Loan Foreclosure Sales Post Shelbourne Decision

While the pandemic in 2020 placed enormous strain on the commercial real estate market, distressed property owners and mezzanine borrowers benefitted from policies and protections instituted by state and federal governments which also, indirectly, afforded injunctive relief from foreclosure sales by the courts in efforts to prevent what may have otherwise been seen as fire sales by anxious lenders. As previously reported by Morrison Cohen on March 23, 2021, the decision by the First Department in Shelbourne BRF v. SR 677 Bway may now signal a shift away from courts providing relief that would otherwise enjoin lenders from proceeding with such sales. 

In an article published by Commercial Observer on April 13, 2021 entitled, “Protection Dissolving for Borrowers in NY Seeking to Halt UCC Sales,” Morrison Cohen Chair and Co-Managing Partner Y. David Scharf re-visits the Shelbourne appellate decision and offers his outlook on litigation emerging from a potential next wave of mezzanine loan foreclosures. 

Mr. Scharf, who has significant experience representing investors, lenders, and borrowers in litigation arising from financial crises, also shares his winning strategy with Commercial Observer on stopping UCC foreclosure sales post Shelbourne.