Real Estate & Property Law

Bankruptcy and Condemnation

By Alan Ackerman

News Leader

CU wants to buy Spence's property -- and two other tracts owned by others -- to build a new bus transfer station at the corner of St. Louis Street and Benton Avenue.

CU has tried to negotiate a sale with Spence, but the tract, the former site of the Arbor Hotel, is included in an ongoing bankruptcy case Spence filed with the court.

On Wednesday, CU asked the court to remove the tract from the bankruptcy case so the utility could move ahead with efforts to acquire it.

"Nothing can be done with the property while it's in bankruptcy court," said CU attorney Rex McCall.

"For us to file for eminent domain, the bankruptcy court has to make it so it's not part of the bankruptcy case. If our request is approved, there will still be negotiations with her."

CU already has agreed to pay $305,000 for one of the transfer station tracts and $510,000 for the other.

However, those deals are contingent on CU reaching a deal with Spence for her property.

Neither Spence nor her bankruptcy lawyer, David Schroeder, returned News-Leader calls for a comment.

The acquisition of property in bankruptcy is not an easy issue. The rules of valuation are different. The effect of the impending condemnation frequently is a part of the cause for the bankruptcy filing. The Bankruptcy Court maintains the authority and discretion to release the property to allow the agency to file an eminent domain proceeding.

Full post as published by National Eminent Domain Blog on May 13, 2009 (boomark / email).