Meruelo Maddux Properties-760 S. Hill Street, LLC v. Bank of America, N.A.

Chapter 11 debtor Meruelo Maddux Properties-760 S. Hill Street LLC (“MMP Hill”), one of more than 50 subsidiaries of Meruelo Maddux Properties, Inc. (“MMPI”), filed a motion seeking a determination that it and other subsidiaries were not subject to the single asset real estate provisions of the Bankruptcy Code, 11 U.S.C. §§ 101 (51B) and 362(d)(3). Creditor Bank of America filed a cross motion seeking to apply the single asset real estate provisions to MMP Hill and another subsidiary not at issue in this case. The bankruptcy court concluded that MMP Hill “appears to have the characteristics of a [single asset real estate] case” but decided that it would not apply the single asset real estate provisions because of the consolidated, interrelated nature of the business operations of MMPI and its subsidiaries. Bank of America appealed to the district court, which reversed the bankruptcy court’s determination regarding MMP Hill, holding that MMP Hill should be treated as a single asset real estate debtor because there is no “whole enterprise exception” to the single asset real estate provisions in the plain language of the statute. MMP Hill now appeals, arguing that Congress…