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Rock Hill, S.C., Mayor John Gettys spoke out for the first time since the Carolina Panthers terminated agreements to build a training facility in Rock Hill and David Tepper’s GT Real Estate subsequently filed for bankruptcy, accusing Tepper of filing bankruptcy to avoid paying contractors for their work on the project. In early March, Tepper Sports and Entertainment, another one of David Tepper’s companies, said it was pausing the Rock Hill project because the city of Rock Hill did not hold up its end of the bargain in the deal. WCNC Charlotte later discovered the city failed to secure $225 million in bonds to pay for roads, sidewalks and other public infrastructure on the site. Gettys denies any wrongdoing by the city. In a statement released in April, the city of Rock Hill said that it “met all obligations required under the agreements.” “With the Panthers, the owner filed for bankruptcy in order to get away from paying his general contractors that they got to move down to this area, which is what it is,” Gettys said on Thursday. GT Real Estate owes creditors millions of dollars. Among them is York County, with a claim of $21 million, as well as Mascaro/Barton Malow, a joint venture construction management group over the site project, with a $26 million claim. On the filing paperwork, the city of Rock Hill is listed as a creditor for just over $100 in unpaid utility payments. 

The coronavirus pandemic made the legal system in New York much friendlier toward commercial property owners with assets in default who are facing a foreclosure sale under the Uniform Commercial Code (UCC). But, it looks as though the empathy is starting to run out, according to a commentary in the Commercial Observer reported. A ruling by Justice Jennifer Schecter in the First Department of the Appellate Division of the New York Supreme Court last month has made it more difficult for borrowers and their counsel to claim hardship and economic uncertainty caused by the pandemic as a reason to enjoin, or avoid, a UCC Article 9 foreclosure auction. The decision, in Shelbourne BRF LLC et al. v. SR 677 Bway LLC, has also likely “opened the floodgates” to a potential wave of last-resort chapter 11 bankruptcy filings from borrowers who fail to receive injunctive relief to stop UCC auction sales and save their interests in properties, according to lawyers and brokers who examined the decision. Through the pandemic, market volatility made it easier for courts to deem a UCC foreclosure sale “commercially unreasonable,” thus hampering a lender’s ability to work through default scenarios. Typically, if a borrower seeks injunctive relief to halt a UCC foreclosure sale, it’s up to them to showcase the possibility of irreparable harm as a result of it — by detailing to the court the negative effects of the loss of equity interest in a property’s controlling entity from the foreclosure sale. Judge Schecter essentially stamped that out last month, determining that a borrower’s threatened loss of equity interest does not represent irreparable harm.