Legal News

Family Court Facility Developer Objects to Lifting of Bankruptcy Stay

By Brian Harris

By Gina Passarella
Of the Legal Staff

Northwest 15th Street Associates, the original developer of the proposed site for the new Family Court facility, filed an objection Friday to the First Judicial District?s request to lift the automatic stay in the bankruptcy case. The FJD wants the stay lifted so it may file a separate action seeking a declaratory judgment establishing who owns the plans for the stalled project.

Northwest said the automatic stay is irrelevant to the issues between the FJD and itself. Northwest is arguing that either the FJD has no legal right to the plans or the FJD does own them and, therefore, doesn?t need Northwest?s permission to use them. Lifting the stay wouldn?t answer that question, Northwest said.

The filing was one of several developments Friday in Northwest?s bankruptcy case in the Eastern District of Pennsylvania.

Northwest also filed a limited objection to the Philadelphia Parking Authority?s request to lift the stay in the PPA?s case against the developer in Philadelphia Common Pleas Court. In that case, the parking authority is seeking a declaratory judgment to establish whether Northwest was in default of a mortgage agreement the two parties entered regarding the air rights to 15th and Arch streets, the proposed site of the new Family Court building. Northwest said it wouldn?t object to partially lifting the stay.

?The debtor acknowledges that, for any plan to be confirmed and consummated in this case, the issues raised in the [PPA complaint] must be resolved,? Northwest said in the filing.

Northwest continued, however, that it didn?t think the PPA?s second issue raised in its motion to lift the stay ? whether Northwest was in default ? can be remedied through a stay relief motion.

Northwest removed on Friday the PPA?s common pleas court action to the federal court, claiming it was related to the bankruptcy case and therefore the bankruptcy court had jurisdiction over it as a related adversary proceeding.

In both of its objections filed Friday, Northwest reiterated its arguments that it was not in default of a mortgage conferring to Northwest the air rights to 15th and Arch and that it was the proper owner of the plans to develop the site.

Full post as published by The Legal Intelligencer Blog on August 06, 2010 (boomark / email).