Partner Stuart Lederman argued before the New Jersey Supreme Court on April 1st on behalf of client LB-RPR REO Holdings in a property condemnation case, Merchantville v. Malik & Son. LB is the holder of a final judgment of foreclosure on a 54-unit apartment complex owned by Malik & Son.
The Borough of Merchantville condemned the property for redevelopment, but failed to negotiate with LB, notwithstanding the fact that LB had already secured a final judgment of foreclosure and scheduled a Sheriff’s sale. At issue is whether a condemning authority has a duty, under the Eminent Domain Act, to negotiate in good faith with a lender that holds a final judgment of foreclosure.
As covered in the New Jersey Law Journal, Stuart charged Merchantville with engaging in “sharp practices,” stating that “there is an absolute duty of fairness, candor and good faith” owed to the public by government entities.
Merchantville filed its condemnation complaint in December 2011 after Malik & Son rejected its $270,000 purchase offer. LB moved to dismiss the complaint on the grounds that LB should have been the controlling party in the negotiations because it held the final judgment of foreclosure and was the real party in interest. LB also argued that the Borough’s offer was per se deficient because Malik had received previous offers of $1.85 million and most recently $1.25 million for the property from the Borough’s own developer. Rudy Randazzo drafted the Petition for Certification.
Read the New Jersey Law Journal article, “N.J. Court Mulls Duty of Condemnor To Negotiate With Mortgage Holder.”
