Galleria 2425 Owner case should be dismissed, lender says

By Sarah Lizee

Olympia, Wash., July 21 – Galleria 2425 Owner LLC’s Chapter 11 bankruptcy case should be dismissed, lender National Bank of Kuwait, SAKP, New York Branch, said in a motion filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

The lender said there is no possibility of a successful reorganization of the debtor.

As background, the case involves a single real estate asset located at 2425 West Loop South, Houston.

The debtor defaulted on a $51.6 million loan to purchase the property in April 2021. The debtor has not made a payment since its initial default and the amounts currently owed to the lender are over three times the appraised value of the property, the lender said.

The property also has little to no revenue to speak of and the debtor has also allowed the property to be encumbered with various tax liens, some of which were purchased by the debtor’s sole owner, the lender added.

Monthly payments at the contract, non-default rate of interest would be about $350,000, which greatly exceeds the property’s monthly revenue, the lender said.

“The single reason the debtor filed this case was to delay or harm NBK by seeking to enjoin or otherwise delay NBK from exercising its contractual rights, namely, to foreclose on the property,” the lender said in the motion.

The Houston-based single-asset real estate company filed Chapter 11 bankruptcy on July 5 under case number 23-60036.

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