670 B.R. 40
Bankr. E.D. Va.2025Background
- Amerinvest, LLC, a Virginia LLC, owns three adjacent commercial real estate parcels in Alexandria, all acquired together in 1999 and operated as rental properties.
- The company is managed and solely owned by Daria Karimian.
- Amerinvest defaulted on a $1.8 million loan (now held by APSEC Resolution, LLC) secured by these parcels, leading to a foreclosure which was stayed by their subchapter V Chapter 11 bankruptcy filing.
- All parcels are used for commercial rental income, with all rents commingled and taxed as a single economic unit, despite being legally distinct lots.
- APSEC moved to designate Amerinvest as a single asset real estate (SARE) debtor, which would bar subchapter V and small business debtor status, while Amerinvest sought to maintain those designations.
Issues
| Issue | Plaintiff's Argument (APSEC) | Defendant's Argument (Amerinvest) | Held |
|---|---|---|---|
| Whether Amerinvest is a SARE debtor | Parcels are single project: acquired, used, financed, and taxed as one; sole activity is leasing | Parcels are legally distinct; no unifying plan; mere ownership/leasing insufficient | Amerinvest is a SARE debtor |
| Whether parcels constitute a single project | Common plan: all parcels used for commercial renting; economic unit | Fenced/physically separate lots; can be sold separately; no active plan to combine | Parcels are a single project |
| Small business debtor/subchapter V eligibility | SARE status excludes small business/subchapter V | Not SARE as properties not unified project | Eligibility revoked due to SARE status |
| Burden of proof on SARE/small business eligibility | Amerinvest bears burden as seeking subchapter V benefits | Burden should be on movant (APSEC) | Debtor bears burden; failed to meet burden |
Key Cases Cited
- In re Philmont Dev. Co., 181 B.R. 220 (Bankr. E.D. Pa. 1995) (SARE includes multiple contiguous properties operated as a unit for rental income)
- In re Kkemko, Inc., 181 B.R. 47 (Bankr. S.D. Ohio 1995) (SARE can be raw land or income-producing property held for investment)
- In re McGreals, 201 B.R. 736 (Bankr. E.D. Pa. 1996) (no SARE where adjacent parcels lacked unifying plan and only one was leased)