QuickLiquidity has announced that it was approved by the U.S. Bankruptcy Court in the Western District of North Carolina to be the stalking horse bidder to purchase a 32.55% minority interest position in a 70,000-square foot office building located in Charlotte, NC for $1.6 million.
A stalking horse bid is the initial bid on an asset in bankruptcy that is being marketed for sale. The stalking horse bid establishes a “floor” price for the asset as a way to avoid low-ball bids at an auction and maximize the asset’s value.
The Bankruptcy Court approved the employment of a local brokerage to serve as the Chapter 7 Trustee’s broker to find a suitable purchaser for the 32.55% interest. They actively marketed the interest for months and although multiple parties had demonstrated interest, QuickLiquidity was the only party that came forward with a formal offer to purchase the interest.
Due to the 32.55% interest being a minority interest position with no say in management decisions, the interest is an non-liquid and non-controlling investment. This adds an additional layer of risk as the task of managing and ultimately selling the office building is left up to the managing members’ discretion. This increased risk typically makes it harder to sell minority interest interests in commercial real estate.
However, where others see risk QuickLiquidity see’s opportunity. QuickLiquidity has a proven track record of success as a direct buyer and lender against minority interest positions in commercial real estate LLCs, LPs, TICS, and DSTs on a nationwide basis.
Shortly after QuickLiquidity was approved as the stalking horse bidder, one of the other owners of the office building expressed a desire to bid on the 32.55% interest. This led the Trustee to hold an auction for all qualified bidders to participate. QuickLiquidity participated in the auction with the hope of purchasing the interest but ultimately the other owner, who was also the managing member, ended up winning the auction with a bid of $3.3 million. While QuickLiquidity was disappointed to miss out on winning the auction, they were incredibly pleased that their involvement as the stalking horse bidder resulted in the Trustee’s gain of millions of dollars in value.
“We have a tremendous amount of experience with purchasing and lending against minority interest positions in commercial real estate, whether or not in bankruptcy. This allows us to understand and close complicated transactions quickly,” said A. Yoni Miller, Principal of QuickLiquidity.
For more information contact: Yoni Miller – firstname.lastname@example.org – 561-221-0881