The Uniform Commercial Code, which governs commercial transactions in the U.S. says that auctions like this one must be commercially reasonable. The sale, which was arranged in just two months, scheduled in the middle of a pandemic and will only sell the individual loans as one package, is far from that, HFZ argued in court papers. It would also make it impossible for the developer to sell more condo units in hopes of paying off more debt.
“The appropriate way to auction off the membership interests would be to allow a bidder to bid not on only the entire portfolio but to allow bidders to bid on one, two three or all four or any combination,” said Y. David Scharf, one of HFZ’s lawyers on the case.
Feldman’s company acquired the properties—88-90 Lexington Avenue, The Astor at 235 West 75th Street, and Fifty-Third and Eighth at 301 West 53rd Street—