650 B.R. 785
Bankr. S.D.N.Y.2023Background
- Debtor Nuovo Ciao‑Di, LLC owns two contiguous commercial condominium units at 350 Sixth Avenue, conveyed under a single deed and subject to a single first‑priority mortgage held by DCC Vigilant, LLC (note principal $15,850,000).
- Debtor filed Chapter 11 on January 20, 2023; DCC moved to designate the case as a “single asset real estate” (SAR) case under 11 U.S.C. § 101(51B).
- DCC’s position: Debtor’s business is rental income from the Properties, the units have been treated as one property, and the units should be deemed a single property or single project (citing proximity, single deed/mortgage, and contemplated sale plans).
- Debtor’s position: the units are separate parcels (distinct NYC Dept. of Finance lot numbers), have different legal/designation characteristics (first floor easement; second floor community facility), different past tenants/vacancy histories, separate valuations, and plans to market/sell them separately.
- The court held a hearing and applied the SAR definition and the ‘‘single property or project’’ fact‑intensive analysis; it found DCC failed to prove the units are a single property or single project and denied the SAR designation.
Issues
| Issue | DCC's Argument | Debtor's Argument | Held |
|---|---|---|---|
| Whether the two contiguous condominium units are a "single property" under §101(51B) | Single deed, single mortgage, always treated as one property → single property | Separate parcels/lot numbers; distinct legal features and uses; separately valueable and salable → not single property | Not a single property; adjacency/common deed/mortgage insufficient |
| Whether the units constitute a "single project" (common plan or scheme) | Proximity, single deed/mortgage, and contemplated combined sale/subdivision show a common plan → single project | No common plan or unified use; separately leased historically; different legal designations and active plans to sell separately → not single project | Not a single project; movant failed to show linkage by common plan or scheme |
Key Cases Cited
- In re JJMM Int’l Corp., 467 B.R. 275 (Bankr. E.D.N.Y. 2012) (multiple adjacent parcels can be a single project when treated as one project by debtor)
- In re McGreals, 201 B.R. 736 (Bankr. E.D. Pa. 1996) (common ownership or border alone is insufficient; parcels must be linked by a common plan or scheme)
- In re Hassen Imps. P’ship, 466 B.R. 492 (Bankr. C.D. Cal. 2012) (articulated non‑exclusive four‑factor test for single‑project analysis)
- In re Heather Apartments Ltd. P’ship, 366 B.R. 45 (Bankr. D. Minn. 2007) (discussing purpose of SAR provisions to accelerate confirmation and limit unfairness)
- In re Archway Apartments, Ltd., 206 B.R. 463 (Bankr. M.D. Tenn. 1997) (background on congressional intent and SAR expedited process)