Bankruptcy judge approves auction of Statler Towers
Solicitations of bids, sale to occur in July
A U. S. Bankruptcy Court judge has cleared the way for the Statler Towers to be sold by the end of July.
Judge Carl L. Bucki on Wednesday approved a request made by attorneys for bankruptcy court trustee Morris Horwitz to conduct a sale. The company that operates the downtown landmark was forced into Chapter 11 bankruptcy in April over the objections of developer Bashar Issa.
The timeline presented in court calls for bids for the property to be submitted by July 9. If two or more qualified bids are received, an auction will be held on July 14. A court hearing on the sale is set for July 21, with the closing expected on July 31.
“I would expect the sale would be completed by the end of July,” Bucki said.
The trustee’s attorneys had sought the quick action to line up a new buyer for a property beset by mounting bills and a dwindling tenant base.
“We’re pleased at the outcome,” said Garry Graber, an attorney representing the trustee. “It will help to avoid a blight on the city of Buffalo.”
Ray Fink, an attorney representing Mohmoud al Issa, the father of Bashar Issa, unsuccessfully sought to delay the sale process beyond July by perhaps a couple of months. Mohmoud al Issa claims he holds a $4.5 million mortgage on the property, while Graber challenged the validity of that mortgage.
Fink said he agreed the property needed to be sold, but he did not want the process carried out in what he called a “hurried-up, fire-sale” manner.
Bucki, acknowledging the unresolved dispute over the mortgage, approved Graber’s request that Mohmoud al Issa not be allowed to make a credit bid for the Statler when it goes up for sale. Attorneys for the trustee said allowing the credit bid would have a “chilling effect” on other bidders for the Statler, since others would have to compete using cash.
After the hearing, Fink said that he did not know if he would contest the judge’s rulings, saying he had to talk to his client. Fink contended the credit bid should have been permitted to be entered to ensure the property is not sold “for some ridiculously low price.”
Joseph Leon, a New York City attorney representing Bashar Issa, sought to counter what he said were unfair negative impressions about his client and his handling of the Statler project. Leon told Bucki about walking into the Statler for the first time. “I was very impressed. I was expecting to see wires and drywall everywhere, and I haven’t seen any of that,” he said.
It was Leon’s first appearance in court on behalf of Bashar Issa.
Horwitz said the sale will be advertised locally and in some national publications.
“We’re going to get the attention of significant real estate investors,” he said.
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