A bankruptcy judge declined to boot a Manhattan skyscraper backed by Chinese conglomerate HNA Group Co. out of chapter 11, ruling the building owner had legitimate reasons to fear a forced sale, WSJ Pro Bankruptcy reported. Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., ruled that 245 Park Avenue owner PWM Property Management LLC could remain under court protection, deciding against its business partner SL Green Realty Corp., the skyscraper’s property manager, which argued the chapter 11 case was filed in bad faith. PWM filed for bankruptcy in October, saying it was at imminent risk of losing control of its bank accounts to mortgage lenders. Major League Baseball, a key tenant of 245 Park, is leaving the property next year, and lenders could begin confiscating cash if SL Green didn’t find a replacement tenant, according to PWM’s court papers. SL Green argued the chapter 11 case was filed to give PWM an unfair advantage in a two-party dispute that should be handled through litigation, rather than bankruptcy. Judge Walrath disagreed, saying that PWM was in financial distress and filed bankruptcy ahead of a possible “cascade” of negative consequences. “You don’t have to wait until the terrible events happen to file a bankruptcy proceeding,” the judge said in a bench ruling Monday.
