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Bank of America, N.A v. M Rashid Holdings, LLC

United States District Court, E.D. Michigan, Southern Division

April 17, 2018

BANK OF AMERICA, N.A., Plaintiff,
v.
M RASHID HOLDINGS, LLC, and MASHIYAT RASHID, Defendants.

         ORDER DENYING MOTION FOR ENTRY OF ORDERS APPROVING (I) BIDDING PROCEDURES, (II) SALE OF REAL PROPERTY LOCATED AT 2990 W. GRAND BLVD., DETROIT MICHIGAN, FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS WITH ENCUMBRANCES ATTACHING TO THE SALE PROCEEDS, AND (III) RELATED RELIEF [#35]

          Denise Page Hood Chief Judge, United States District Court .

         I. INTRODUCTION

         On October 31, 2017, the Court appointed a receiver, attorney Michael A. Stevenson (the “Receiver”), for the real property at 2990 W. Grand Blvd, Detroit, Michigan (the “Property”). On February 26, 2018, the Receiver filed a “Motion for Entry of Orders Approving (I) Bidding Procedures, (II) Sale of Real Property Located at 2990 W. Grand Blvd., Detroit, Michigan, Free and Clear of Liens, Claims, Encumbrances and Interests with Encumbrances Attaching to the Sale Proceeds, and (III) Related Relief (“Motion to Sell Property”). [Dkt. No. 35] Plaintiff Bank of America filed a response indicating that it concurred with the relief sought in the Motion to Sell Property, and Defendants M. Rashid Holdings, LLC and Mashiyat Rashid filed a response in opposition to the Motion to Sell Property. A hearing on the Motion to Sell Property was held on March 13, 2018.

         II. BACKGROUND

         Defendant M Rashid Holdings LLC (“Rashid Holdings”) is the owner of the Property. Plaintiff issued a loan of approximately $2 million to Rashid Holdings dated January 30, 2017 (the “Loan Agreement”), with a mortgage on the Property securing the loan. Defendant Mashiyat Rashid (“Rashid”) is a guarantor of the mortgage on the Property.

         On July 6, 2017, Defendant Rashid was indicted for alleged attempt and conspiracy to commit healthcare fraud and related claims in a case before this Court (Case No. 17-20465, hereinafter referred to as “the Criminal Case”), and the Criminal Case remains pending. On October 31, 2017, the Court appointed the Receiver and granted the Receiver the following powers with respect to sale of the Property:

2. Possession and Control of Receivership Property. The Receiver is authorized to immediately take possession and control of the Receivership Property, and to manage and, if appropriate, recommend and consummate the sale of same (with such sale subject to the approval of the Court), and as is consistent with any restraining order entered in Case No. 2:17-cr-20465 (E.D. Mich.), and to otherwise exercise the powers and duties set forth in this Order. The Receiver is authorized to remove any trustee, beneficiary, representative or agent of Rashid Holdings or Rashid from control and/or management of the affairs of the Receivership Property.
13. Sale of the Mortgaged Property. The Receiver is authorized to, on behalf and in the name of Rashid Holdings, expeditiously and diligently sell the Mortgaged Property, but only with the approval of the Court, consistent with the provisions of 28 U.S.C. § 2001(a), and any restraining order entered in Case No. 2:17-cr-20465 (E.D. Mich.), under the following conditions:
a. The sales shall each be for cash, unless otherwise authorized by the Court, for amounts subject to the approval of the Court.
b. The sales, approved by the Court, shall be free and clear of all mortgage interests, security interests and other liens, as applicable, which may be transferred to the net proceeds of sales. No person or entity shall have any redemption rights with respect to any sale effectuated by the Receiver, and each sale shall be final upon entry of an Order of the Court confirming same.

[Dkt. No. 21, PgID 415, 420]

         III. ANALYSIS

         The Receiver seeks to sell the Property. After canvassing investors known to him, he met with persons at Jim Saros Real Estate Services, a commercial real estate broker (“Saros”), for purposes of determing the value of the Property. Saros proposed marketing the Property for the Receiver, indicating that pricing for the Property could be in the high $2, 000, 000s to low $3, 000, 000s range. The Receiver received five offers of interest on the Property before contacting Anthony Sanna at Integra Realty Resource - Detroit, a real estate appraiser (“Sanna”), to obtain a certified appraisal of the Property. Although a certified appraisal has not been completed, the Receiver represents that Sanna estimated the value of the Property consistent with the Saros' range, and the five offers of interest were also within that range. For ...


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