MV Realty’s case should be dismissed or converted, U.S. trustee says

By Sarah Lizee

Olympia, Wash., March 13 – MV Realty PBC, LLC is facing a motion from a U.S. trustee to dismiss its Chapter 11 bankruptcy case or covert it to Chapter 7, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Florida.

Region 21 U.S. trustee Mary Ida Townson said the debtors filed the cases to stay all the state litigation and move all litigation into one forum and sought an emergency restraining order against several states, which was denied.

The debtors then moved to seek a preliminary injunction. The court denied the motion and refused to stay any actions by the states other than the collection of money.

“The debtors have incurred meaningful losses as they continue forward with litigation,” Townson said in the motion.

“The debtors are not seeking to rehabilitate.”

The U.S. trustee said the debtors’ goal at this point seems to be battling the states individually through litigation and to continue harvesting fees from homeowner benefit agreements until either funds are no longer sufficient to continue operating or the state litigation results in a sufficient loss of assets such that activities must cease.

“There is a continuing loss to or diminution of the estate and an absence of reasonable likelihood for rehabilitation,” Townson said.

The Boca Raton, Fla.-based real estate company filed bankruptcy on Sept. 22, 2023 under Chapter 11 case number 23-17590.

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