A court hearing on the bankruptcy sale of Governor’s Square apartment complex in uptown Harrisburg had been scheduled for Feb. 29.
- However, it has been moved to April 2 per an order from Chief Bankruptcy Judge Henry Van Eck of the U.S. Bankruptcy Court for the Middle District of Pennsylvania.
Why is this happening: The complex’s bankrupt owner, Uptown Partners LP, asked for extra time in order to work on securing approval of the sale from the U.S. Department of Housing and Urban Development, according to legal filings.
- HUD is objecting to the sale, in part because the deal does not direct any sale proceeds to the agency.
- Citing deed covenants attached to the property, HUD has said it is entitled to 50% of the proceeds.
- The city and a group of tenants also are objecting to the deal.
What’s the deal: Following a bankruptcy auction, New Jersey-based ANCDI Properties is offering to pay just over $9.6 million for the 222-unit Governor’s Square.
- The city and the tenant group want to ensure the deal does not end requirements to keep the property as affordable housing.
- They also want to ensure the buyer commits adequate funds to fix up the complex, an effort that is expected to cost millions of dollars.
- The bankruptcy trustee has filed an objection, as well, over concern that a payout to HUD could reduce what’s left over for unsecured creditors, who are owed nearly $813,000, according to court filings.
- The trustee wants $100,000 set aside for the unsecured creditors, which include a law firms, a private trash hauler, a staffing company and utilities.
- Existing language carves out “up to” $100,000 — “which suggests that any such carveout could be significantly less,” the trustee wrote.
