Commercial Observer Article About UCC Foreclosures Details Client Daol Rexmark’s Victory in Battle Over Union Station

An October 19 article in the Commercial Observer entitled “As UCC Foreclosures Soar, Mezz Lender Rexmark in Driver’s Seat at DC’s Union Station” discussed the recent spike in Uniform Commercial Code (UCC) foreclosures, pointing to Morrison Cohen client Daol Rexmark as an example of a mezzanine lender that has taken control of a troubled asset, namely Union Station.

Daol Rexmark, a New York-based lender acting as U.S. agent for Korea-based Kookmin Bank, was recently declared to be temporary rightful owner of Union Station by U.S. District Judge Gregory H. Woods, who granted the lender a preliminary injunction after borrower Ashkenazy Acquisition Corp. defaulted on its loan and was foreclosed on but then “refused to step aside.”

The Commercial Observer article reported that in the August 23 hearing, Y. David Scharf stated, “Mr. Ashkenazy and his companies are continuing to exercise control over an entity over which they no longer have an ownership interest” and described the contractual rights of his client as being “clear” and “unequivocal.” Judge Woods agreed, stating, “The lender is expressly authorized to take action to protect its interests in, and to, the collateral and collect on it.”  

Meanwhile, Amtrak filed an eminent domain claim to take control of the station in April. The article stated that “Scharf acknowledged that Amtrak’s case creates a ‘slightly different left turn,’” but that “eminent domain action is a lengthy process that could take years to resolve. In the meantime, the contractual rights of the property’s mezzanine lender have been enforced, and Rexmark is in the driver’s seat at Union Station.”

Read the Commercial Observer article here.