A New York District Court upheld that a New York Bankruptcy Court was in fact allowed to deny a petition which sought monetary relief for a flawed mortgage title, as reported in a January 3rd, 2013 New York Law Journal article.

Facts of the case involved Hoti, who owned an apartment complex which was secured by a promissory note as part of a mortgage agreement. The note holder, GECMC, petitioned to foreclose on the apartment complex upon the note becoming mature. Hoti responded by filing for a Chapter 11 bankruptcy due their financial hardships. The bankruptcy was successfully filed in 2012, and contained that the party’s “cash collateral order” was to be created by the party’s legal representative.

GECMC sought attack Hoti’s bankruptcy. Hoti responded by attempting to file to dismiss GECMC’s petition against them on the grounds that the original mortgage title was flawed because it was not created by a legal representative. They further argued that GECMC forged a power attorney. Upon inspection the District court concluded to deny Hoti’s motion. Based on the nature of the case the court ruled that the motion should not be dismissed because GECMC sought equitable relief not monetary relief. GECMC was attempting to collect the apartment complex, not the monetary amount of the property therefore the power of attorney was not necessary.

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