Atlas MF Mezzanine Borrower LLC v. Macquarie Texas Loan Holder LLC

Summary

The Appellate Division, First Department unanimously affirmed the dismissal after trial of the debtor's claim challenging the commercial reasonableness of a secured-party auction. The court held that the defendant met its burden by demonstrating reasonable marketing, bidding, and sale procedures, and rejected the plaintiff's arguments concerning the auction price, bidding restrictions, contract modifications, and good faith and fair dealing.

Holdings

1. The auction process was commercially reasonable, and Count 2 was properly dismissed. The marketing efforts, bidder participation, auction terms, bidder selection, deposit arrangements, contract negotiations, and HUD-approval deadline did not establish a commercially unreasonable sale.
2. The trial court did not improvidently exercise its discretion in crediting defendant's expert and evidence over plaintiff's conflicting expert opinion.
3. The complaint was moot because defendant ultimately allowed plaintiff to bid.
4. Plaintiff could not revive the previously dismissed good-faith-and-fair-dealing claim.

Questions Presented

1. Whether the secured party's auction process was commercially reasonable under UCC § 9-603(a), including the timing, marketing, bidding requirements, contract and deposit requirements, bid selection, and later modification of the sale contract.
2. Whether the trial court improperly credited defendant's expert and evidence over plaintiff's conflicting expert evidence.
3. Whether plaintiff's claim that defendant attempted to block plaintiff from bidding remained justiciable after defendant ultimately allowed plaintiff to bid.
4. Whether plaintiff could revive its previously dismissed good-faith-and-fair-dealing claim.

Disposition

affirmed