UBS Commercial Mtge. Trust 2007-FL1 v Garrison Special Opportunities Fund L.P.
Supreme Court of New York, New York County
March 8, 2011, Decided
Melvin L. Schweitzer, J.
This matter involves, inter alia, the validity of a guaranty of a real estate financing loan by a sophisticated distressed real estate investment fund. The core question in the case is whether the action is based upon an instrument for the payment of money only and, therefore, entitles plaintiff to bring an action for summary judgment pursuant to CPLR 3213.
In July 2007, UBS Real Estate Securities Inc. (as Original Lender) entered into a First Mortgage Loan Agreement (the Loan Agreement) with Penzance Cascades North, LLC, Penzance Cascades West, LLC, Penzance Parkridge Five, LLC, and Penzance Parkridge Two, LLC (collectively, Borrowers). Pursuant to the Loan Agreement, the Original Lender loaned the Borrowers the aggregate principal amount of $107,000,000 (the Loan) for the purpose of acquiring certain properties located in Reston, Virginia (the Properties). Borrowers executed a Promissory Note (the Note) evidencing the Loan. Plaintiffs subsequently became the successors-in-interest to the Original Lender when the Original Lender assigned its interest in the Loan Agreement to plaintiffs.
Additional financing was obtained by the equity owner of the Borrowers in the form of a mezzanine loan in the principal amount of $31,500,000, secured by a pledge of 100% of the membership interests in the Borrowers. In December 2007, the mezzanine loan was assigned to defendant, Garrison Special Opportunities Fund LP (Garrison). At the time Garrison became the holder of the mezzanine loan, it was not a guarantor of the obligations of the Borrowers under the Loan Agreement.
The Borrowers did not make payment to plaintiffs on August 9, 2009, the date the Loan initially became payable in full. Borrowers exercised the Loan Agreement's option for a one-year extension and extended the maturity date to August 9, 2010. Borrowers did not make payment to [****2] plaintiffs when the Loan became due on August 9, 2010. On August 26, 2010, plaintiffs notified Borrowers that the outstanding balance of the Loan had become due and payable.Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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33 Misc. 3d 1204(A) *; 938 N.Y.S.2d 230 **; 2011 N.Y. Misc. LEXIS 4634 ***; 2011 NY Slip Op 51774(U) ****
[****1] UBS Commercial Mortgage Trust 2007-FL1, Commercial Mortgage Pass-through Certificates, Series 2007-FL1, and Normandy Reston Office, LLC, Plaintiffs, against Garrison Special Opportunities Fund L.P., Defendant.
Notice: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS.
PUBLISHED IN TABLE FORMAT IN THE NEW YORK SUPPLEMENT.
Guaranty, Borrowers, Obligations, Lender, guarantor, finance, payment of money, real estate, unenforceable, summary judgment, public policy, notice, Forbearance, Properties, provisions, references, documents, maturity, mortgage, recourse