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(Chipman, William) (Entered: 09/08/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/476981037/","id":476981037,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492559424/","id":492559424,"tags":[],"absolute_url":"/docket/72070200/90/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T09:26:21.877535-07:00","date_modified":"2026-09-04T09:26:21.877550-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"90","attachment_number":null,"pacer_doc_id":"042022997019","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2026-09-04T09:26:21.850012-07:00","date_modified":"2026-09-04T09:26:21.859069-07:00","date_filed":"2026-05-21","time_filed":null,"entry_number":90,"recap_sequence_number":"2026-05-21.001","pacer_sequence_number":null,"description":"Transcript regarding Hearing Held 05/15/26 RE: Bench Ruling on Motion to Dismiss. Remote electronic access to the transcript is restricted until 8/19/2026. The transcript may be viewed at the Bankruptcy Court Clerk's Office after 8/19/26. For information about how to obtain a transcript, Contact the Court Reporter/Transcriber, RELIABLE, at Telephone number 302-654-8080. Filed by Hudson 1701/1706, LLC, Hudson 1702, LLC . Notice of Intent to Request Redaction Deadline Due By 5/28/2026. Redaction Request Due By 6/11/2026. Redacted Transcript Submission Due By 6/22/2026. Transcript access will be restricted through 8/19/2026. (KR) (Entered: 05/21/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/476974691/","id":476974691,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492553017/","id":492553017,"tags":[],"absolute_url":"/docket/72070200/106/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T09:01:45.586299-07:00","date_modified":"2026-09-28T04:07:52.997569-07:00","sha1":"1230b11e5365f37b5d59c8571a05f12489da03dd","page_count":4,"file_size":208060,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.106.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.106.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 106 Filed 09/04/26 Page 1 of 4\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n In re: Chapter 11\n\n Hudson 1701/1706, LLC, et al., 1 Case No. 25-11853 (KBO)\n (Jointly Administered)\n Debtors.\n\n\n HUDSON 1701/1706, LLC, a Delaware\n limited liability company; and HUDSON\n 1702, LLC, a Delaware limited liability Adv. Pro. No. 25-52471 (KBO)\n company,\n Plaintiff,\n v.\n\n 356W58 Ground Lessor LLC, a\n Delaware limited liability company,\n\n Defendant.\n\n\n NOTICE OF AGENDA OF MATTERS SCHEDULED FOR\n HEARING ON SEPTEMBER 9, 2026, AT 9:30 A.M. (EASTERN TIME)\n\n\n THIS PROCEEDING WILL BE CONDUCTED IN-PERSON.\n ALL COUNSEL AND WITNESSES ARE EXPECTED TO ATTEND UNLESS PERMITTED TO APPEAR\n REMOTELY VIA ZOOM. PLEASE REFER TO JUDGE OWENS\u2019S CHAMBERS PROCEDURES\n (HTTPS://WWW.DEB.USCOURTS.GOV/CONTENT/JUDGE-KAREN-B-OWENS) AND THE COURT\u2019S\n WEBSITE (HTTP://WWW.DEB.USCOURTS.GOV/ECOURT-APPEARANCES) FOR INFORMATION ON\n WHO MAY PARTICIPATE REMOTELY, THE METHOD OF ALLOWED PARTICIPATION (VIDEO OR\n AUDIO), JUDGE OWENS\u2019S EXPECTATIONS OF REMOTE PARTICIPANTS, AND THE ADVANCE\n REGISTRATION REQUIREMENTS.\n\n REGISTRATION IS REQUIRED BY 4:00 P.M. (EASTERN TIME) THE BUSINESS DAY BEFORE THE\n HEARING UNLESS OTHERWISE NOTICED USING THE ECOURTAPPEARANCES TOOL AVAILABLE ON\n THE COURT\u2019S WEBSITE.\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 mailing address is c/o FTI\nConsulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the Americas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 106 Filed 09/04/26 Page 2 of 4\n\n\n\n\nI. MATTER GOING FORWARD\n\n 1. Debtors' Motion for an Order Determining Amount of Prospective Post-Petition\n Monthly Rent Due as an Administrative Expense Claim [Docket No. 524; Filed on June\n 2, 2026]\n\n Response Deadline: June 16, 2026, at 4:00 p.m. (ET)\n\n Responses Received:\n\n A. 356W58 Ground Lessor LLC's Objection to Debtors' Motion for an Order\n Determining Amount of Prospective Post-Petition Monthly Rent Due as an\n Administrative Expense Claim [Docket No 553; Filed on June 16, 2026]\n\n Related Documents:\n\n A. Notice of Hearing on Debtors' Motion for an Order Determining Amount of\n Prospective Post-Petition Monthly Rent Due as an Administrative Expense\n Claim [Docket No. 576; Filed on July 7, 2026]\n\n B. Certification of Counsel Regarding Stipulated Pretrial Schedule [D.I. 614; Filed\n on July 31, 2026]\n\n C. Order Approving Stipulated Pretrial Schedule [D.I. 616; Entered on August 3,\n 2026].\n\n D. The Debtors' Supplemental Memorandum in Support of Their Motion for an\n Order Determining Amount of Prospective Post-Petition Monthly Rent Due as\n an Administrative Expense Claim [Docket No. 661; Filed on September 4,\n 2026]\n\n E. 356W58 Ground Lessor LLC's Rent Motion Pre-Hearing Brief [Docket No.\n 662; Filed on September 4, 2026]\n\n F. [SEALED] Declaration in Support (Declaration of Matthew B. McGuire in\n Support of 356W58 Ground Lessor LLC's Rent Motion Pre-Hearing Brief\n [Docket No. 663; Filed on September 4, 2026]\n\n Status: This matter will go forward.\n\n\n\n\n 2\n\f Case 25-52471-KBO Doc 106 Filed 09/04/26 Page 3 of 4\n\n\n\n\nII. ADVERSARY MATTER GOING FORWARD\n\n 2. Hudson 1701/1706, LLC, et al., v. 356W58 Ground Lessor LLC;\n Adv. Pro. No. 25-52471 (KBO)\n\n A. Amended Complaint [Adv. Docket No. 91; Filed on June 10, 2026].\n\n B. Certificate of Service regarding Amended Complaint [Adv. Docket No 92;\n Filed on June 17, 2026]\n\n C. Motion to Dismiss Adversary Proceeding Filed by 356W58 Ground Lessor\n LLC [Adv. Docket No. 93; Filed on July 9, 2026]\n\n D. 356W58 Ground Lessor LLC's Memorandum of Law in Support of Its Motion\n to Dismiss the Amended Complaint [Adv. Docket No. 94; Filed on July 9, 2026]\n\n E. Declaration of Matthew B. McGuire in Support of 356W58 Ground Lessor\n LLC's Motion to Dismiss the Amended Complaint [Adv. Docket No. 95; Filed\n on July 9, 2026]\n\n F. The Debtors' Opposition to the Defendant's Motion to Dismiss the Amended\n Complaint [Adv. Docket No. 97; Filed on July 30, 2026]\n\n G. Certification of Counsel for Approval of Proposed Scheduling Order [Adv.\n Docket No. 98; Filed on July 31, 2026]\n\n H. Order Approving Stipulated Schedule Re: Motion to Dismiss [Adv. Docket No.\n 99; Entered on August 3, 2026]\n\n I. Notice of Filing Redline of Amended Complaint [Adv. Docket No. 101; Filed\n on August 11, 2026]\n\n J. 356W58 Ground Lessor LLC's Reply Memorandum of Law in Further Support\n of Its Motion to Dismiss the Amended Complaint [Adv. Docket No. 102; Filed\n on August 13, 2026]\n\n K. 356W58 Ground Lessor LLC\u2019s Notice of Completion of Briefing [Adv. Docket\n No. 103; Filed on September 3, 2026]\n\n L. Notice of Hearing of 356W58 Ground Lessor's Motion to Dismiss the Amended\n Complaint [Adv. Docket No. 104; Filed September 3, 2026]\n\n Status: Oral argument on 356W58 Ground Lessor LLC's Motion to Dismiss the\n Amended Complaint will go forward.\n\n\n\n\n 3\n\f Case 25-52471-KBO Doc 106 Filed 09/04/26 Page 4 of 4\n\n\n\n\nDated: September 4, 2026 CHIPMAN BROWN CICERO & COLE, LLP\n Wilmington, Delaware\n /s/ William E. Chipman, Jr.\n William E. Chipman, Jr. (No. 3818)\n Mark D. Olivere (No. 4291)\n Aaron J. Bach (No. 7364)\n Alison R. Maser (No. 7430)\n Hercules Plaza\n 1313 North Market Street, Suite 5400\n Wilmington, Delaware 19801\n Telephone: (302) 295-0191\n Email: chipman@chipmanbrown.com\n olivere@chipmanbrown.com\n bach@chipmanbrown.com\n maser@chipmanbrown.com\n\n -and-\n\n BOIES SCHILLER & FLEXNER LLP\n Robert D. Gordon, Esq. (admitted pro hac vice)\n Michael M. Fay. Esq. (admired pro hac vice)\n Jenny H. Kim, Esq. (admitted pro hac vice)\n Jeffrey Waldron, Esq. (admitted pro hac vice)\n Katherine Zhang, Esq. (admitted pro hac vice)\n 55 Hudson Yards, 20th Floor,\n New York, New York 10001\n Telephone: (212) 446-2300\n Email: rgordon@bsfllp.com\n mfay@bsfllp.com\n jkim@bsfllp.com\n jwaldron@bsfllp.com\n kzhang@bsfllp.com\n\n Counsel to the Debtors and Debtors in Possession\n\n\n\n\n 4\n\f","ocr_status":2,"date_upload":"2026-09-04T09:01:54.063847-07:00","document_number":"106","attachment_number":null,"pacer_doc_id":"042023175975","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Agenda of Matters Scheduled for Hearing - Notice (Multi)","acms_document_guid":""}],"date_created":"2026-09-04T09:01:45.033772-07:00","date_modified":"2026-09-04T09:03:53.728705-07:00","date_filed":"2026-09-04","time_filed":"11:59:17","entry_number":106,"recap_sequence_number":"2026-09-04.001","pacer_sequence_number":391,"description":"Notice of Agenda of Matters Scheduled for Hearing Filed by Hudson 1701/1706, LLC. 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(related document(s)103, 104) (Matthews, Gene) (Entered: 09/03/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/476815073/","id":476815073,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492388840/","id":492388840,"tags":[],"absolute_url":"/docket/72070200/103/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-03T09:03:18.619587-07:00","date_modified":"2026-09-09T12:42:21.167319-07:00","sha1":"4c6c5e530911a332cd28473ceb40b51e7f73000f","page_count":3,"file_size":192288,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.103.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.103.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 103 Filed 09/03/26 Page 1 of 3\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\nIn re: Chapter 11\n\nHudson 1701/1706 LLC, Case No. 25-11853 (KBO)\n\n Debtors.1 (Jointly Administered)\n\n\nHUDSON 1701/1706, LLC, a Delaware limited\nliability company; and HUDSON 1702, LLC, a\nDelaware limited liability company, Adv. Proc. No. 25-52471 (KBO)\n\n Plaintiffs,\n\n v.\n\n356W58 GROUND LESSOR LLC, a Delaware\nlimited liability company,\n\n Defendant.\n\n\n NOTICE OF COMPLETION OF BRIEFING\n\n PLEASE TAKE NOTICE that 356W58 Ground Lessor LLC (the \u201cDefendant\u201d), by and\n\nthrough its undersigned counsel, hereby gives notice, pursuant to Rule 7007-4 of the Local Rules\n\nof the United States Bankruptcy Court for the District of Delaware, that briefing concerning\n\n356W58 Ground Lessor LLC\u2019s Motion to Dismiss the Amended Complaint [Adv. Docket No. 93]\n\n(the \u201cMotion to Dismiss\u201d) is now complete and ready for disposition by the Court.\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 headquarters and the\nmailing address for the Debtors is 11440 San Vicente Boulevard, 2nd Floor, Los Angeles, CA 90045.\n\f Case 25-52471-KBO Doc 103 Filed 09/03/26 Page 2 of 3\n\n\n\n\n PLEASE TAKE FURTHER NOTICE that the relevant pleadings are as follows:\n\n Adv.\n Date\nTab Pleading Docket\n Filed No.\n1. Amended Complaint 6/10/2026 91\n 356W58 Ground Lessor LLC\u2019s Motion to Dismiss the\n2. 7/9/2026 93\n Amended Complaint\n 356W58 Ground Lessor LLC\u2019s Memorandum of Law in\n3. 7/9/2026 94\n Support of Its Motion to Dismiss the Amended Complaint\n Declaration of Matthew B. McGuire in Support of 356W58\n4. Ground Lessor LLC's Motion to Dismiss the Amended 7/9/2026 95\n Complaint\n The Debtors\u2019 Opposition to Defendant\u2019s Motion to Dismiss\n5. 7/30/2026 97\n the Amended Complaint\n Certification of Counsel Regarding Stipulated Schedule re:\n6. 7/31/2026 98\n Motion to Dismiss\n7. Order Approving Stipulated Schedule re: Motion to Dismiss 8/3/2026 99\n\n8. Notice of Filing of Redline of Amended Complaint 8/11/2026 101\n 356W58 Ground Lessor LLC\u2019s Reply Memorandum of Law\n9. in Further Support of Its Motion to Dismiss the Amended 8/13/2026 102\n Complaint\n\n\n\n\n [Signature Page Follows]\n\n\n\n\n 2\n\f Case 25-52471-KBO Doc 103 Filed 09/03/26 Page 3 of 3\n\n\n\n\nDated: September 3, 2026 LANDIS RATH & COBB LLP\n Wilmington, Delaware\n /s/ Soumya P. Venkateswaran\n Adam G. Landis (No. 3407)\n Matthew B. McGuire (No. 4366)\n Katherine S. Dute (No. 6788)\n Soumya P. Venkateswaran (No. 7278)\n 919 Market Street, Suite 1800\n Wilmington, Delaware 19801\n Telephone: (302) 467-4400\n Facsimile: (302) 467-4450\n Email: landis@lrclaw.com\n mcguire@lrclaw.com\n dute@lrclaw.com\n venkateswaran@lrclaw.com\n\n \u2013 and \u2013\n\n ADLER & STACHENFELD LLP\n Kirk L. Brett (admitted pro hac vice)\n Patrick O\u2019Connor (admitted pro hac vice)\n 555 Madison Avenue, 6th floor\n New York, New York 10022\n Telephone: (212) 883-1700\n Facsimile: (212) 883-8883\n Email: kbrett@adstach.com\n poconnor@adstach.com\n\n Counsel to 356W58 Ground Lessor LLC\n\n\n\n\n 3\n\f","ocr_status":2,"date_upload":"2026-09-04T09:25:06.278447-07:00","document_number":"103","attachment_number":null,"pacer_doc_id":"042023173684","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Completion of Briefing - Notice","acms_document_guid":""}],"date_created":"2026-09-03T09:03:18.601668-07:00","date_modified":"2026-09-04T06:50:32.673399-07:00","date_filed":"2026-09-03","time_filed":"11:33:43","entry_number":103,"recap_sequence_number":"2026-09-03.001","pacer_sequence_number":364,"description":"Notice of Completion of Briefing. (related document(s)91, 93, 94, 95, 97, 98, 99, 101, 102) Filed by 356W58 Ground Lessor LLC (Venkateswaran, Soumya) (Entered: 09/03/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/476815070/","id":476815070,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492388837/","id":492388837,"tags":[],"absolute_url":"/docket/72070200/104/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-03T09:03:18.517823-07:00","date_modified":"2026-09-09T12:45:09.511896-07:00","sha1":"7e250036fb4580fd1844c32fa363fb506e0c589b","page_count":2,"file_size":154569,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.104.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.104.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 104 Filed 09/03/26 Page 1 of 2\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\nIn re: Chapter 11\n\nHudson 1701/1706 LLC, Case No. 25-11853 (KBO)\n\n Debtors. 1 (Jointly Administered)\n\n\nHUDSON 1701/1706, LLC, a Delaware limited Adv. Proc. No. 25-52471 (KBO)\nliability company; and HUDSON 1702, LLC, a\nDelaware limited liability company, Adv. Ref. Nos. 91, 93, 94, 95, 97, 98, 99, 101 & 102\n\n Plaintiffs,\n\n v.\n\n356W58 GROUND LESSOR LLC, a Delaware\nlimited liability company,\n\n Defendant.\n\n\n NOTICE OF HEARING\n\n PLEASE TAKE NOTICE that a hearing on 356W58 Ground Lessor\u2019s Motion to Dismiss\n\nthe Amended Complaint [Adv. D.I. 93] has been scheduled for September 9, 2026 at\n\n9:30 a.m. (ET) before The Honorable Karen B. Owens, Chief Judge at the United States\n\nBankruptcy Court for the District of Delaware, 824 North Market Street, 6th Floor, Courtroom\n\nNo. 3, Wilmington, Delaware 19801.\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\n number, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 headquarters and the\n mailing address for the Debtors is 11440 San Vicente Boulevard, 2nd Floor, Los Angeles, CA 90045.\n\f Case 25-52471-KBO Doc 104 Filed 09/03/26 Page 2 of 2\n\n\n\n\nDated: September 3, 2026 LANDIS RATH & COBB LLP\n Wilmington, Delaware\n /s/ Soumya P. Venkateswaran\n Adam G. Landis (No. 3407)\n Matthew B. McGuire (No. 4366)\n Katherine S. Dute (No. 6788)\n Soumya P. Venkateswaran (No. 7278)\n 919 Market Street, Suite 1800\n Wilmington, Delaware 19801\n Telephone: (302) 467-4400\n Facsimile: (302) 467-4450\n Email: landis@lrclaw.com\n mcguire@lrclaw.com\n dute@lrclaw.com\n venkateswaran@lrclaw.com\n\n \u2013 and \u2013\n\n ADLER & STACHENFELD LLP\n Kirk L. Brett (admitted pro hac vice)\n Patrick O\u2019Connor (admitted pro hac vice)\n 555 Madison Avenue, 6th floor\n New York, New York 10022\n Telephone: (212)883-1700\n Facsimile: (212)883-8883\n Email: kbrett@adstach.com\n poconnor@adstach.com\n\n Counsel to 356W58 Ground Lessor LLC\n\n\n\n\n 2\n\f","ocr_status":2,"date_upload":"2026-09-04T06:56:03.043010-07:00","document_number":"104","attachment_number":null,"pacer_doc_id":"042023173687","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Hearing - Notice","acms_document_guid":""}],"date_created":"2026-09-03T09:03:18.497128-07:00","date_modified":"2026-09-04T06:50:32.692984-07:00","date_filed":"2026-09-03","time_filed":"11:35:39","entry_number":104,"recap_sequence_number":"2026-09-03.002","pacer_sequence_number":376,"description":"Notice of Hearing of 356W58 Ground Lessor's Motion to Dismiss the Amended Complaint (related document(s)91, 93, 94, 95, 97, 98, 99, 101, 102) Filed by 356W58 Ground Lessor LLC Hearing scheduled for 9/9/2026 at 09:30 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. (Venkateswaran, Soumya) (Entered: 09/03/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/474380930/","id":474380930,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/489880374/","id":489880374,"tags":[],"absolute_url":"/docket/72070200/102/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-08-13T13:35:41.126824-07:00","date_modified":"2026-09-10T15:44:30.666957-07:00","sha1":"aefba697641b6baf09b2256c1e199b7e100538d3","page_count":20,"file_size":562005,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.102.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.102.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 1 of 20\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n In re: Chapter 11\n Hudson 1701/1706 LLC,\n Debtors. 1 Case No. 25-11853 (KBO)\n\n (Jointly Administered)\n HUDSON 1701/1706, LLC, a Delaware\n limited liability company; and HUDSON\n 1702, LLC, a Delaware limited liability\n company,\n Plaintiffs, Adv. Proc. No. 25-52471 (KBO)\n v.\n 356W58 GROUND LESSOR LLC, a\n Delaware limited liability company,\n Defendant.\n\n 356W58 GROUND LESSOR LLC\u2019S REPLY MEMORANDUM OF LAW IN\n FURTHER SUPPORT OF ITS MOTION TO DISMISS THE AMENDED COMPLAINT\n\n Dated: August 13, 2026\n Wilmington, Delaware\n\n LANDIS RATH & COBB LLP ADLER & STACHENFELD LLP\n Adam G. Landis (No. 3407) Kirk L. Brett (admitted pro hac vice)\n Matthew B. McGuire (No. 4366) Patrick O\u2019Connor (admitted pro hac vice)\n Katherine S. Dute (No. 6788) 555 Madison Avenue, 6th floor\n Soumya P. Venkateswaran (No. 7278) New York, New York 10022\n 919 Market Street, Suite 1800 Telephone: (212) 883-1700\n Wilmington, Delaware 19801 Facsimile: (212) 883-8883\n Telephone: (302) 467-4400 Email: kbrett@adstach.com\n Facsimile: (302) 467-4450 poconnor@adstach.com\n Email: landis@lrclaw.com\n mcguire@lrclaw.com\n dute@lrclaw.com\n venkateswaran@lrclaw.com\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax\nidentification number, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The\nDebtors\u2019 headquarters and the mailing address for the Debtors is 11440 San Vicente Boulevard,\n2nd Floor, Los Angeles, CA 90045.\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 2 of 20\n\n\n\n\n TABLE OF CONTENTS\n\n Page\n\nPRELIMINARY STATEMENT .................................................................................................... 1\n\nARGUMENT .................................................................................................................................. 3\n\n I. Debtors Only Pay Lip Service to the Required Plausibility Standard ................................ 3\n\n II. Debtors Failed to Add or Clarify Facts to Demonstrate that the Lease is Not What\n it Purports to Be .................................................................................................................. 4\n\n III. Law of the Case Precludes Debtors from Relitigating Fact Findings ................................. 8\n\n IV. Quasi-Estoppel Precludes Plainly Inconsistent Positions by Parkview and Debtors ......... 9\n\n V. Cases Relied Upon by Debtors are Either Off-Point or Supportive of Dismissal ............ 11\n\n VI. Debtors\u2019 Fourth Amendment Avoidance Claims are Implausible ..................................... 14\n\nCONCLUSION ............................................................................................................................. 15\n\n\n\n\n i\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 3 of 20\n\n\n\n\n TABLE OF AUTHORITIES\n\n Page(s)\n\nCases\n\nAshcroft v. Iqbal,\n 556 U.S. 662 (2009) .................................................................................................................... 3\n\nChristianson v. Colt Indus. Operating Corp.,\n 486 U.S. 800 (1988) .................................................................................................................... 8\n\nDavis v. Wells Fargo,\n 824 F.3d 333 (3d Cir. 2016) ........................................................................................................ 3\n\nFarmer v. Lanigan,\n 2016 WL 4107693 (D.N.J. Aug. 1, 2016) ............................................................................... 8, 9\n\nHamilton v. Leavy,\n 322 F.3d 776 (3d Cir. 2003) .................................................................................................. 8, 14\n\nIn re Barney\u2019s, Inc.,\n 206 B.R. 328 (Bankr. S.D.N.Y. 1997) ........................................................................................ 7\n\nIn re City of Philadelphia Litig.,\n 158 F.3d 711 (3d Cir. 1998) ........................................................................................................ 8\n\nIn re Integrated Health Servs., Inc.,\n 260 B.R. 71 (Bankr. D. Del. 2001) ................................................................................. 7, 11, 12\n\nIn re Montgomery Ward, L.L.C.,\n 469 B.R. 522 (Bankr. D. Del. 2012) ................................................................................... 11, 13\n\nIn re PCH Assocs.,\n 804 F.2d 193 (2d Cir. 1986) ...................................................................................................... 14\n\nIn re SilverRock Dev. Co., LLC,\n No. 24-11647 (MFW), 2025 WL 3492145 (D. Del. Dec. 5, 2025) .......................................... 12\n\nIn re Zohar III, Corp.,\n 639 B.R. 73 (Bankr. D. Del. 2022) ............................................................................................. 3\n\nInt\u2019l Trade Admin. v. Rensselaer Polytechnic Inst.,\n 936 F.2d 744 (2d Cir. 1991) ................................................................................................ 12, 13\n\n\n\n\n ii\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 4 of 20\n\n\n\n\nL A Apparel, Inc. v. Straight A Co., LP,\n No. MC 3:21-285, 2022 WL 17417173 (M.D. Pa. Dec. 5, 2022)............................................. 10\n\nMOAC Mall Holdings LLC v. Transform Holdco LLC, (In re Sears Holdings Corp.),\n 2024 WL 5113165 (2d Cir. Dec. 16, 2024) .............................................................................. 13\n\nSchmidt v. Skolas,\n 770 F.3d 241 (3d Cir. 2014) ........................................................................................................ 3\n\nTanksley v. Daniels,\n 902 F.3d 165 (3d Cir. 2018) ........................................................................................................ 3\n\n\nRules\n\nFed. R. Bankr. P. 7012(b) ............................................................................................................... 1\n\nFed. R. Civ. P. 12(b)(6)......................................................................................................... 1, 3, 12\n\n\n\n\n iii\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 5 of 20\n\n\n\n\n 356W58 Ground Lessor LLC (\u201cLandlord\u201d), through its undersigned counsel, respectfully\n\nsubmits this reply memorandum of law in further support of its motion to dismiss (the \u201cMotion\u201d)\n\n[D.I. 93] 2 the Amended Complaint filed by Debtors Hudson 1701/1706, LLC and Hudson 1702,\n\nLLC (together, the \u201cDebtors\u201d) [D.I. 91] with prejudice pursuant to Fed. R. Bankr. P. 7012(b) and\n\nFed. R. Civ. P. 12(b)(6) and in response to the Debtors\u2019 Opposition to the Motion [D.I. 97] (the\n\n\u201cOpposition\u201d).\n\n PRELIMINARY STATEMENT\n\n Although the Debtors employed a different author for their Amended Complaint, the\n\nfundamental allegations are the same as those previously dismissed by this Court. This should\n\ncome as no surprise. Both of the Debtors\u2019 complaints have sought to characterize (or\n\nrecharacterize) the terms of a static, written document. The somewhat different words used in the\n\nAmended Complaint to describe the fixed nature of the Lease do not render Debtors\u2019 claims any\n\nmore plausible than they were in the initial Complaint.\n\n This Court has already observed that the Lease itself evidences no other relationship\n\nbetween Landlord and Debtors except for lessor and lessee. Like other true leases, the Lease here\n\nprovides for the reversion of the Property to Landlord at the end of the lease term, and there is no\n\npurchase option for the tenant-Debtors. The Amended Complaint and the Debtors\u2019 responsive brief\n\nfail to address these critical facts at all. Other features of the Lease are also typical, including terms\n\nrelating to use of the premises, the effect of a condemnation, and \u201ctriple net\u201d features.\n\n\n\n\n2\n Terms utilized but not otherwise defined herein shall have the meanings ascribed to them in\n356W58 Ground Lessor LLC\u2019s Memorandum of Law in Support of its Motion to Dismiss the\nAmended Complaint [D.I. 94] (the \u201cMemorandum\u201d or \u201cMem.\u201d). Unless otherwise stated, all\ndocket references are to the Adversary Proceeding number 25-52471.\n\n 1\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 6 of 20\n\n\n\n\n Nor do the Debtors\u2019 allegations regarding the circumstances surrounding the execution of\n\nthe Lease render their claims any more plausible. In the original Complaint and again in the\n\nAmended Complaint, Debtors have relied upon marketing materials to criticize the Lease. And\n\nboth the original Complaint and the Amended Complaint try to attack the method used to establish\n\nrent. But these arguments were already considered and properly rejected by the Court, and they do\n\nnot overcome the import of the terms of the Lease itself.\n\n Similarly, the Debtors are unable to overcome the fact that all of the Lease documents were\n\nthe result of arm\u2019s-length negotiations among at least three sophisticated parties. Parkview chose\n\nto enter into a leasehold loan and approved the Lease in writing on multiple occasions. Parkview\n\nalso represented to the world that its collateral was a leasehold interest \u2013 including through public\n\nfilings, a note sale to Northwind, and in publications of a UCC foreclosure sale. In their Amended\n\nComplaint and their response to the instant motion to dismiss, the Parkview-controlled Debtors\n\nfail to address these matters, even though they clearly demonstrate that the Debtors\u2019 claims are\n\nthoroughly implausible.\n\n The Amended Complaint\u2019s deficiencies extend to the avoidance claims, too. The Amended\n\nComplaint only echoes the same cursory allegations as those in the initial Complaint. And the\n\nAmended Complaint fails to explain how the Fourth Amendment could be considered so\n\nfundamentally unfair to the Debtors in light of Parkview\u2019s express written approval (at a time when\n\nParkview was unaffiliated with the Debtors).\n\n The Amended Complaint represents not only a disregard for the contractual commitments\n\nof the Debtors and Parkview, but also of this Court\u2019s directive to articulate what, exactly, the Lease\n\nis (if it isn\u2019t a true lease). Instead, the Debtors offer a menu of options for the Court to consider.\n\nMoreover, by stating that they will reject the Lease if they do not prevail here, Debtors attempt to\n\n\n\n 2\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 7 of 20\n\n\n\n\nforce this Court into wrongly permitting their baseless claims in order to avoid a failed\n\nreorganization.\n\n The reality is that the Parkview-controlled Debtors are unable to state plausible claims to\n\nrecharacterize or avoid the Lease, and in effect, this adversary proceeding is now in a place no\n\ndifferent than it was in May, when the Court cancelled the then-scheduled trial and dismissed the\n\noriginal Complaint. Accordingly, the Amended Complaint should be dismissed with prejudice.\n\n ARGUMENT\n\n I. Debtors Only Pay Lip Service to the Required Plausibility Standard\n\n Debtors fail to describe or apply the correct pleading standard under FRCP 12(b)(6) and\n\npay only lip service to the requirement of alleging plausible claims. Focusing on the conventional\n\nimperative to construe allegations in a complaint in the light most favorable to the plaintiff, Debtors\n\nignore that courts may review documentary evidence and rely upon their own common sense to\n\ndetermine whether a plaintiff has pled facts that nudge the claims across the line from conceivable\n\nto plausible. See In re Zohar III, Corp., 639 B.R. 73, 89\u201390 (Bankr. D. Del. 2022) (citing Ashcroft\n\nv. Iqbal, 556 U.S. 662, 679 (2009); Davis v. Wells Fargo, 824 F.3d 333, 341 (3d Cir. 2016);\n\nSchmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014); Tanksley v. Daniels, 902 F.3d 165, 172 (3d\n\nCir. 2018)).\n\n As further discussed below, Debtors disregard the plain terms of the most significant\n\ndocumentary evidence \u2013 the Lease \u2013 and this Court\u2019s May 15 findings concerning the import of\n\nthose plain terms. Instead, Debtors seek to stage a mini trial by putting forth their whole case in\n\ntheir opposition (ignoring this Court\u2019s In re Zohar III, Corp. decision) and repeatedly offer\n\nconclusory statements that their claims are plausible. But that effort must fail because the Lease\n\ndisproves Debtors\u2019 claims, as this Court already knows. See In re Zohar III, Corp., 639 B.R. at\n\n\n\n 3\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 8 of 20\n\n\n\n\n89\u201390 (a \u201ccourt need not feel constrained to accept as truth conflicting pleadings that make no\n\nsense, or that would render a claim incoherent, or that are contradicted either by statements in the\n\ncomplaint itself or by documents upon which its pleadings rely, or by facts of which the court\n\nmay take judicial notice.\u201d) (internal citations omitted) (emphasis added).\n\n II. Debtors Failed to Add or Clarify Facts to Demonstrate that the Lease is Not What it\n Purports to Be\n\n The Amended Complaint does not meaningfully rely upon any factual allegations that were\n\nnot considered by this Court when it dismissed the original Complaint. The Court has already\n\nreviewed the Lease and made specific findings as to its character. See Ex. X (May 15, 2026 Hr\u2019g\n\nTr.) 3 at 8:6-9 (\u201cIn sum, nothing in the complaint points to a credit or a lending relationship between\n\nthe ground lessor and the debtors or, quite frankly, any other relationship, except for lessor and\n\nlessee.\u201d). And the Court has already considered the Fourth Amendment. See id. at 8:11-22. Debtors\n\nattach and rely upon both documents again in their Amended Complaint. See Amended Complaint\n\nExs. A and C. But the purported \u201cadd[ed] and clarif[ied] numerous facts\u201d 4 do not and cannot alter\n\nthe plain terms of the Lease and this Court\u2019s May 15, 2026 observations because any new facts or\n\narguments necessarily relate to static documents that this Court has already considered and has no\n\nreason to reevaluate now.\n\n To illustrate the point: the Amended Complaint contains some information that was learned\n\nduring discovery, including a statement attributed to Landlord\u2019s principal Max Nipon that MSP\u2019s\n\nground lease product is \u201ceffectively an alternative form of financing to the market\u201d (Amended\n\n\n\n\n3\n Unless otherwise stated, all citations to exhibits are to those included in the McGuire Declaration\n[D.I. 95].\n4\n Opp. at 1.\n\n 4\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 9 of 20\n\n\n\n\nComplaint at \u00b6 28), and deposition testimony that Landlord based the rent it required under the\n\nLease in part on a yield on its investment in the Property. Amended Complaint at \u00b6\u00b6 61-62.\n\n But Debtors offer these items to support facts that they already alleged in the original\n\nComplaint, were considered by the Court, and dismissed. Citing a one-page marketing piece, the\n\noriginal Complaint alleged that the Lease was an alternative financing arrangement. See Complaint\n\nat \u00b6 34 (\u201cLikewise, GLR touts its ground lease schemes to its investors and potential borrowers as\n\n\u2018A COMPELLING FINANCING SOLUTION\u2019 that is a \u2018return-enhancing alternative to\n\nconventional financing\u2019 offering \u2018a highly competitive cost of capital.\u2019\u201d) (emphasis added by\n\nDebtors in Complaint). The Court and Debtors\u2019 counsel debated this one-page marketing piece at\n\nthe April 21 oral argument on the motion to dismiss the Complaint, and the Court later held that\n\n\u201cTrue leases are, of course, forms of financing\u2026\u201d See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 4:8-9; Ex.\n\nY (Apr. 21, 2026 Hr\u2019g Tr.) at 141:7\u2013144:20.\n\n And the original Complaint devoted an entire section to the notion that the rent was\n\ncalculated to \u201censure [a] return on investment.\u201d See Complaint at \u00b6\u00b6 69-77. But again, the Court\n\nstudied that yield allegation and made a specific finding that the rent compensated Landlord for\n\nthe use of its property. See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 8:1-5 (\u201cThe terms of the lease suggest,\n\nwhen viewed with all other existing facts, that the payments compensate the lessor for its\n\nagreement to allow the debtors to develop the property and sublease it to residential tenants over\n\nthe next 99 years.\u201d). The Court has also already recognized that landlords enter into leases to\n\nachieve a yield on its investment. See Ex. Y (April 21, 2026 Hr\u2019g Tr.) at 144:9-11 (The Court:\n\n\u201cBecause leases are financing tools that are utilized by all parties to maximize their return on a\n\nproject such as this.\u201d).\n\n\n\n\n 5\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 10 of 20\n\n\n\n\n Debtors make perfunctory references to only two other documents in their opposition: the\n\nClosing Agreement (Amended Complaint, Ex. B) and the Bill of Sale (Amended Complaint, Ex.\n\nD). But neither document does anything to negate this Court\u2019s May 15 findings as to the meaning\n\nand import of the Lease and Fourth Amendment. 5\n\n A critical finding in the Court\u2019s May 15 decision was that the Lease requires the reversion\n\nof the Property and improvements back to Landlord at termination or expiration with no\n\nopportunity for Debtors to acquire the Property. See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 6:8-16.\n\nDebtors remain unable to explain how the Lease could be recharacterized given Landlord\u2019s\n\nreversionary interest. Neither of the proffered alternatives posited by Debtors \u2013 a loan or a joint\n\nventure \u2013 can accommodate Landlord\u2019s reversionary interest. Debtors\u2019 failure to address the\n\nreversion is telling. 6\n\n Debtors repeat their misguided argument that the Right-Size Payment feature of the Lease\n\nand Fourth Amendment could be evidence of a non-lease feature. This misrepresents the purpose\n\nand structure of the Right-Size Payment. The purpose of the Right-Size Payment was to address\n\nthe possibility that Debtors might be unable to carry out their stated business plan. In that\n\ncircumstance, rather than having an immediate default and lease termination, the Lease afforded\n\n\n5\n Debtors bizarrely argue that Landlord stands to gain the full value of the Property even though it\ncontributed only 43 percent of the total financing for the acquisition and development of the\nProperty. See Amended Complaint at \u00b6 5. This ignores the agreed-upon role of Debtors as\ndeveloper of the Project, with responsibility for bearing the costs of development.\n6\n The Court instructed Debtors to \u201cinclude all forms of relief that you seek and require with respect\nto the ground lease, in order to move the Chapter 11 cases forward, including any counts to\ndetermine the validity, priority, or extent of any purported liens of the ground lessor under Rule\n7001(b), and whether Parkview should be added as a necessary party is also an issues [sic] that\nneeds to be considered.\u201d See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 9:8-14. Debtors ignored these\ninstructions and instead offered \u201cwithout limitation, two possible outcomes\u201d as to the nature of the\nLease (a joint venture or a loan). See Amended Complaint at \u00b6\u00b6 89-93. But either scenario makes\nno sense in light of this Court\u2019s express finding that the Property must revert to the Landlord at\ntermination or expiration.\n\n 6\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 11 of 20\n\n\n\n\nDebtors with a one-time opportunity to maintain possession of the property and pursue a Fallback\n\nBusiness Plan. The obligation to make the Right-Size Payment was to be triggered only by\n\nDebtors\u2019 pursuit of a Fallback Project following their failure to pursue the original Construction\n\nProject and their impending Event of Default under the Lease. 7 See Ex. C at \u00a7 60. And upon making\n\nthe Right-Size Payment, the Base Rent would be reduced (based upon only a formula), so that\n\nongoing rent would better accommodate projected income and thereby create value for the\n\nleasehold.\n\n In any event, Debtors\u2019 recycled criticisms of the Right-Size Payment mechanism, as off-\n\nbase as they are, were already raised in the original Complaint and rejected by the Court, and\n\nDebtors provide no reason for the Court to revisit that rejection.\n\n New allegations or arguments concerning the plain terms of the Lease cannot modify those\n\nterms and should not be grounds for the Court to reevaluate its May 15 decision and order. As the\n\nparty seeking to characterize the Lease as something other than what it purports to be, Debtors\n\nwere already charged with the burden of proof, and the \u201cquantum of evidence necessary to satisfy\n\nthat burden is \u2018substantial.\u2019\u201d In re Barney\u2019s, Inc., 206 B.R. 328, 332 (Bankr. S.D.N.Y. 1997); In\n\nre Integrated Health Servs., Inc., 260 B.R. 71, 75 (Bankr. D. Del. 2001) (\u201cThe party challenging\n\nthe bona fides of the lease carries a \u2018substantial\u2019 burden of proof.\u201d). Debtors failed to carry that\n\nburden in their original Complaint. Certainly, they cannot now carry their burden by simply\n\noffering evidence of facts that they already alleged and were judged insufficient to support a\n\nplausible claim.\n\n\n\n7\n Unlike a loan covenant to maintain a debt service coverage ratio (or any other loan feature), the\nRight-Size Payment is a one-time obligation, is not a fixed amount and serves to enhance the value\nand marketability of the leasehold interest. Tenant has no other obligation to adjust coverage ratios\nor to maintain any income levels under the Lease.\n\n 7\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 12 of 20\n\n\n\n\n Debtors argue that Landlord\u2019s \u201cAnalysis Of The Ground Lease\u2019s Terms Is Fundamentally\n\nFlawed[.]\u201d See Opp. at 17. But Landlord\u2019s analysis in its motion to dismiss the Amended\n\nComplaint matches the Court\u2019s analysis of the Lease, as the Court explained in its May 15 decision,\n\nand as Landlord recounted in the Motion. See Mem. at 15-16.\n\nIII. Law of the Case Precludes Debtors from Relitigating Fact Findings\n\n The Court need not waste its time rethinking things it has already considered. See\n\nChristianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988); In re City of Philadelphia\n\nLitig., 158 F.3d 711, 717\u201318 (3d Cir. 1998).\n\n Debtors are certainly correct that this Court granted leave to file an amended complaint \u201cif\n\nthey wish.\u201d See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 8:23-9:1. However, implicit in the Court\u2019s order\n\nwas the instruction to offer facts, supervening law, and clarifications that would show that the\n\nCourt\u2019s May 15 findings were wrong. See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 8:11-14. (\u201cCounsel\n\nfor the debtors told me a few hearings ago that this was a clear case for recharacterization and if\n\nthat is the case, I would like the debtors to make it clearer when they amend their claim.\u201d). As\n\ndiscussed above, Debtors have not done so. They instead repeat claims and arguments regarding\n\nthe terms of the Lease that were already considered by the Court. None of the purported evidence\n\nrelied upon by Debtors can change the terms of the Lease, even if Debtors describe the same Lease\n\nwith different words. Law of the case thus applies. See Hamilton v. Leavy, 322 F.3d 776, 787 (3d\n\nCir. 2003) (\u201c[I]f the evidence at the two stages of litigation is \u2018substantially similar,\u2019 or if the\n\nevidence at the latter stage provides more support for the decision made earlier, the law of the case\n\ndoctrine will apply.\u201d) (citation omitted).\n\n Debtors\u2019 prominent reliance on Farmer v. Lanigan, 2016 WL 4107693, at *3 (D.N.J. Aug.\n\n1, 2016) (see Opp. at 13-14) is surprising given that that case involves facts wholly dissimilar from\n\n\n\n 8\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 13 of 20\n\n\n\n\nthose at issue here. In that case, the court did not feel bound to an earlier determination that a\n\nprisoner\u2019s abuse claims against a corrections officer were plausible because the amended\n\ncomplaint \u201cchanged the factual allegations which are before this Court.\u201d Farmer, 2016 WL\n\n4107693, at *3 (\u201cwhere the facts of the case have essentially changed and the law as it applies to\n\nthe facts as they now stand must be re-evaluated.\u201d). Unlike the amended complaint in the Farmer\n\ncase, the fact allegations in the Amended Complaint in this case have not \u201cessentially changed\u201d\n\nand thus need not be \u201cre-evaluated.\u201d See id. The Motion concerns the plain terms of static\n\ndocuments \u2013 not the conduct of a corrections officer that cannot be evaluated on a motion to\n\ndismiss.\n\n Debtors\u2019 inability to allege plausible claims for the second time does not mean that\n\n\u201cBankruptcy Rule 7015\u2019s provision permitting parties to amend with leave of Court would be\n\neffectively written out of the Bankruptcy Rules.\u201d Opp. at 12.\n\nIV. Quasi-Estoppel Precludes Plainly Inconsistent Positions by Parkview and Debtors\n\n Debtors argue that they cannot be estopped from bringing a recharacterization claim simply\n\nbecause Debtors referred to the Lease as a lease. See Opp. at 14-15. But that misses the point\n\nentirely as it ignores Parkview\u2019s role as a then-unaffiliated lender treating the Lease as a lease (and\n\ntreating its collateral as a leasehold interest). The long history of Debtors, Parkview and Landlord\n\n(and several nonparties) repeatedly referring to the Lease as a lease \u2013 and more importantly,\n\ntreating it as a lease \u2013 estops the Parkview-controlled Debtors from pretending now that it is\n\nsomething else because the economics of the lease have become unattractive. 8\n\n\n\n8\n Debtors argue that \u201ccases recharacterizing leases often involve considerations beyond the factors\ndiscussed in PCH I and its progeny.\u201d See Opp. at 9. This Court expressed a similar view. See Ex.\nX (May 15, 2026 Hr\u2019g Tr.) at 4:18-25 (\u201cIt is true that the complaint states facts that other courts\nhave cited to support a recharacterization finding; however, the facts in those cases did not stand\nalone. They were always coupled with other facts, that when aggregated and considered together,\n\n 9\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 14 of 20\n\n\n\n\n By entering into the Lease and the related leasehold financing agreements, Debtors and\n\nParkview benefitted from the Lease, as this Court acknowledged at the April 21 hearing and again\n\nin its decision dismissing the Complaint. See Ex. Y (April 21 Hr\u2019g Tr.) at 141:7-23 (the Court:\n\n\u201cI\u2019m holding up what is called a compelling finance solution\u2026 That seems to indicate there\u2019s two\n\npossible scenarios and one is fee-simple and one is what you did. It seems to imply that you chose\n\nnot to go with the fee-simple deal and you went with the other deal.\u201d); Ex. X (May 15, 2026 Hr\u2019g\n\nTr.) at 6:19-7:1 (\u201cthe documents incorporated into the complaint show marketing materials\n\nprepared by the ground lessor that appear to indicate that this ground lease was a financing tool to\n\nbe utilized by developers, such as the debtors, to avoid having to purchase the property in fee-\n\nsimple, with supporting third-party financing, which would add to any necessary construction\n\nfinancing.\u201d). \u201cUnder Delaware law, the doctrine of quasi-estoppel applies when it would be\n\nunconscionable to allow a person to maintain a position inconsistent with one to which he\n\nacquiesced, or from which he accepted a benefit.\u201d L A Apparel, Inc. v. Straight A Co., LP, No. MC\n\n3:21-285, 2022 WL 17417173, at *7 (M.D. Pa. Dec. 5, 2022).\n\n Debtors are also incorrect in arguing that they benefited only from the economic substance\n\nof the Lease. See Opp. Br. at 15 (\u201cthe Debtors dealt with the Ground Lease based on its economic\n\nsubstance, which is not that of a true lease.\u201d). 9 As Landlord has shown \u2013 and Parkview and Debtors\n\nhave not refuted \u2013 Parkview and Debtors structured their relationship as leasehold financing, with\n\n\n\nled the courts to their conclusions that the purported leases at issue were an economic substance,\nsomething other than true leases.\u201d). Certainly, one of the facts worthy of this Court\u2019s consideration\nis the parties\u2019 (and unaffiliated third-parties\u2019) consistent treatment of the Lease as a lease.\n9\n Debtors\u2019 counsel took the opposite view in a colloquy with the Court concerning this very issue.\nSee Ex Y. (April 21, 2026 Hr\u2019g Tr.) at 141:18\u2013142:12 (Fay) (admitting that the Lease was\nstructured as a lease because \u201cthere are benefits from doing it, doing the financing the way that is\nstructured in their document versus just doing a straight-up fee simple. . . . They chose to do this\nfinancing because it had benefits[.]\u201d\n\n 10\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 15 of 20\n\n\n\n\na pledge of equity in the Debtors. And Parkview actually benefitted from the foreclosure of that\n\nequity following publication of documents affirming that Debtors owned a leasehold interest in\n\nthe property. See Exs. T and W. 10 A review of those documents, and other undisputedly authentic\n\ndocuments, requires no fact-intensive inquiry to understand that Parkview benefitted from its own\n\nrepresentations that the Lease is what it purports to be.\n\n Finally, Debtors\u2019 criticism that none of the quasi-estoppel cases cited by Landlord involved\n\na recharacterization claim underscores the absurdity of the Amended Complaint. It is not surprising\n\nthat leasehold lenders (and entities they control) have not previously attempted to recharacterize\n\nthe leases which serve as their collateral.\n\n V. Cases Relied Upon by Debtors are Either Off-Point or Supportive of Dismissal\n\n Left with no choice but to direct attention away from the documentary evidence, Debtors\n\nincessantly rely upon caselaw concerning the elements of an ordinary recharacterization claim.\n\nHowever, this is not an ordinary recharacterization claim because, unlike in the cases cited by\n\nDebtors, the plaintiff here is not a stranger to the Lease. The Parkview-controlled Debtors are\n\nunable to cite any binding caselaw in which a leasehold lender or other party involved in\n\nstructuring the lease successfully challenged an agreement purporting to be a lease. In fact, the\n\nonly binding cases cited in Debtors\u2019 opposition concern challenges from genuine strangers to\n\nagreements that purport to be a true lease. See In re Montgomery Ward, L.L.C., 469 B.R. 522, 526\n\n(Bankr. D. Del. 2012) (bankruptcy plan administrator \u2013 not a party to the lease agreement \u2013 sought\n\nto recharacterize it); In re Integrated Health Servs., Inc., 260 B.R. 71, 76 (Bankr. D. Del. 2001);\n\n\n\n\n10\n It is unclear how Parkview could have conducted a commercially reasonable foreclosure sale if\nit misrepresented the nature of the assets owned by the Debtors. Parkview and Debtors know\nnothing about the Lease now that they did not know at the time of the foreclosure sale.\n\n 11\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 16 of 20\n\n\n\n\nIn re SilverRock Dev. Co., LLC, No. 24-11647 (MFW), 2025 WL 3492145, at *2 (D. Del. Dec. 5,\n\n2025).\n\n In re Integrated Health Servs., Inc. and In re SilverRock Dev. Co., LLC \u2013 two cases cited\n\nby Debtors \u2013 support dismissal. The Integrated Health court denied a recharacterization claim\n\nbecause \u201cthe documents themselves do not support the Debtors\u2019 position.\u201d See 260 B.R. at 77.\n\nThose documents confirmed that the tenants did not have an option to purchase the property at the\n\nend of the lease term, which outweighed the lease\u2019s \u201ctriple-net\u201d feature 11 and the fact that the\n\nproperties were acquired by landlord for tenants\u2019 use. Id. Critically, the leasehold lender testified\n\nthat it lent to the tenants \u201cin reliance on the leases being true leases\u201d irrespective of debtors\u2019 intent\n\nto treat the leases as something else. See id.\n\n In SilverRock, the leasehold lender defended the relevant ground lease and sought to have\n\nthe court treat the ground lease as a true lease (even though the text of the ground lease expressly\n\nstated that it was \u201cessentially a financing device rather than a traditional operating lease\u201d, and the\n\nannual rent was only one dollar per year). 2025 WL 3492145, at *2 (D. Del. Dec. 5, 2025). This\n\nis the opposite fact pattern of the case at hand, in which the leasehold lender (Parkview) is\n\nattacking the characterization of a lease that professes that it is a true lease.\n\n While somewhat relevant to a recharacterization analysis, the other cases cited by Debtors\n\nare inapposite as to Debtors\u2019 Rule 12(b)(6) plausibility burden because, aside from the fact that\n\nthey are not binding precedent, they do not concern analogous facts. For example, the purported\n\nlease in Int\u2019l Trade Admin. v. Rensselaer Polytechnic Inst., 936 F.2d 744 (2d Cir. 1991) (\u201cRPI\u201d)\n\nrequired tenant to pre-pay all rent due throughout the 99-year lease term in the first three years.\n\n\n11\n \u201c[A] triple net lease is not an unusual term in a true lease.\u201d In re Integrated Health Servs., Inc.,\n260 B.R. at 77. This Court agreed. See Ex. X, 6:17-19 (\u201cThe ground lease is a triple-net, 99-year\nlease, but those are common features of true leases . . ..\u201d).\n\n 12\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 17 of 20\n\n\n\n\nSee 936 F.2d at 749-50. The 99-year term alone did not signal that the agreement was not a true\n\nlease. Id. at 749. However, the fact that \u201ctenant\u2019s obligation to pay basic rent had [] ceased\u201d after\n\nthe first three years of the term indicated that the transaction was a disguised sale. Id. at 749-50.\n\nThe court noted that the lease\u2019s triple-net feature was common in true leases. Id. at 751. 12\n\n Similar to RPI, the tenant in MOAC Mall Holdings LLC v. Transform Holdco LLC, (In re\n\nSears Holdings Corp.) prepaid rent for the 100-year term over the first thirty years, after which\n\ntenant owed only ten dollars per year. See No. 24-1354-BK, 2024 WL 5113165, at *3 (2d Cir.\n\nDec. 16, 2024). And after only fifteen years, tenant could sublease or assign the entire lease without\n\nlandlord\u2019s consent. Id. The landlord had already \u201creceived the substance of its bargained for\n\nconsideration\u201d at the time of the dispute (id.), as this Court pointed out while discussing the MOAC\n\ncase at the April 21 hearing. See Ex. Y (April 21, 2026 Hr\u2019g Tr.) at 146:19-147:5 (\u201cWell, it\u2019s\n\nbecause [tenant] prepaid the entire right of occupancy, so it wouldn\u2019t have been fair for the landlord\n\nto get the property that the debtor had prepaid the right to occupy for all those years. That was the\n\nstory in that case.\u201d).\n\n Parkview and Debtors communicated to the world that the Lease is a true lease through the\n\nundisputedly authentic documents that they recorded, and through the UCC foreclosure notices\n\nthat they published. Debtors\u2019 caselaw contains no such parallels.\n\n Still, caselaw cited by Debtors does explain the purpose of looking to the substance of a\n\npurported lease; that is, the label of a document should not constrain third party creditors who had\n\n\n12\n Debtors cite to certain language in RPI to support their argument that a rejection would grant\nLandlord a windfall. See Opp. at 10. But Debtors\u2019 RPI block quote is misleading because it omits\nthe premise of the truncated quote. The full quote begins: \u201cThe tenant has pre-paid the lease and\nconstructed a manufacturing facility on the leased premises. [Landlord] RPI has received the\nsubstance of its bargained for consideration.\u201d See 936 F.2d at 751. Those circumstances are vastly\ndifferent from those at issue here given that the Property is a stalled construction site and rent is\ndue throughout the term of the Lease.\n\n 13\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 18 of 20\n\n\n\n\nnothing to do with the relevant transaction. See In re PCH Assocs., 804 F.2d 193, 198 (2d Cir.\n\n1986) (\u201cit would be inherently inequitable to allow the parties\u2019 choice of label to affect the rights\n\nof third party creditors.\u201d). Here, Parkview\u2019s repeated confirmation and publication of documents\n\nverifying that the Lease is a lease obviates any equitable concerns as to Parkview. In other words,\n\nParkview cannot complain that it would be inequitable to hold that the Lease is a lease because it\n\nwas never a true third party to the Lease.\n\nVI. Debtors\u2019 Fourth Amendment Avoidance Claims are Implausible\n\n Debtors were specifically directed by the Court to allege particularized facts supporting its\n\nclaim seeking avoidance of the Fourth Amendment. See Ex. X (May 15, 2026 Hr\u2019g Tr.) at 8:11-\n\n22. Yet the Amended Complaint, in only five paragraphs rather than four \u2013 simply repeats the\n\nsame allegations contained in the original Complaint. Compare Complaint at \u00b6\u00b6 56-59 with\n\nAmended Complaint \u00b6\u00b6 83-87. The Amended Complaint merely re-alleges that the rent increased\n\nfollowing the execution of the Fourth Amendment.\n\n Given another opportunity by way of their Opposition to this motion, Debtors again failed\n\nto point to new particularized facts. Debtors thus have not complied with the Court\u2019s directive, and\n\nthe Court\u2019s dismissal of the avoidance claims should not be disturbed. See Hamilton, 322 F.3d at\n\n787 (\u201c[I]f the evidence at the two stages of litigation is \u2018substantially similar,\u2019 or if the evidence at\n\nthe latter stage provides more support for the decision made earlier, the law of the case doctrine\n\nwill apply.\u201d) (citation omitted).\n\n In the Amended Complaint and again in their Opposition brief, Debtors refuse to grapple\n\nwith all of the benefits they received under the Fourth Amendment even though Landlord raised\n\nthose benefits in its Motion. See Mem. at 28-29. Those benefits include but are not limited to (i)\n\navoiding termination of the Lease, (ii) time to pursue a Cure Agreement, (iii) time to fix the\n\n\n\n 14\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 19 of 20\n\n\n\n\nFallback Business Plan deficiencies and pursue it, (iv) time to renegotiate the Construction Loan\n\nwith Parkview, (v) time to cure liens, (vi) a five year extension of time to make the Right-Size\n\nPayment, (vii) a more favorable formula for calculating the reduction in rent following a Right-\n\nSize Payment, and (viii) a twelve-month partial abatement of Base Rent. Id.\n\n Debtors\u2019 failure to confront these facts and allege new or clarified facts in support of its\n\navoidance claims necessitates dismissal of Counts II, III, IV and V of the Amended Complaint.\n\n CONCLUSION\n\n For the foregoing reasons, Landlord respectfully requests that this Court dismiss each of\n\nDebtors\u2019 claims with prejudice, and for such other and further relief that the Court deems just and\n\nproper.\n\n\n\n\n 15\n\f Case 25-52471-KBO Doc 102 Filed 08/13/26 Page 20 of 20\n\n\n\n\nDated: August 13, 2026 LANDIS RATH & COBB LLP\n Wilmington, Delaware\n /s/ Matthew B. McGuire\n Adam G. Landis (No. 3407)\n Matthew B. McGuire (No. 4366)\n Katherine S. Dute (No. 6788)\n Soumya P. Venkateswaran (No. 7278)\n 919 Market Street, Suite 1800\n Wilmington, Delaware 19801\n Telephone: (302) 467-4400\n Facsimile: (302) 467-4450\n Email: landis@lrclaw.com\n mcguire@lrclaw.com\n dute@lrclaw.com\n venkateswaran@lrclaw.com\n\n \u2013 and \u2013\n\n ADLER & STACHENFELD LLP\n Kirk L. Brett (admitted pro hac vice)\n Patrick O\u2019Connor (admitted pro hac vice)\n 555 Madison Avenue, 6th floor\n New York, New York 10022\n Telephone: (212) 883-1700\n Facsimile: (212) 883-8883\n Email: kbrett@adstach.com\n poconnor@adstach.com\n\n Counsel to 356W58 Ground Lessor LLC\n\n\n\n\n 16\n\f","ocr_status":2,"date_upload":"2026-09-04T11:21:02.521798-07:00","document_number":"102","attachment_number":null,"pacer_doc_id":"042023137484","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Reply","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492580875/","id":492580875,"tags":[],"absolute_url":"/docket/72070200/102/1/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T11:20:55.044869-07:00","date_modified":"2026-09-08T07:14:26.070007-07:00","sha1":"","page_count":3,"file_size":105141,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"102","attachment_number":1,"pacer_doc_id":"042023137485","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Certificate of Service","acms_document_guid":""}],"date_created":"2026-08-13T13:35:41.105473-07:00","date_modified":"2026-09-04T06:50:32.654767-07:00","date_filed":"2026-08-13","time_filed":"16:07:41","entry_number":102,"recap_sequence_number":"2026-08-13.001","pacer_sequence_number":358,"description":"Reply \\\\ 356W58 Ground Lessor LLC's Reply Memorandum of Law in Further Support of Its Motion to Dismiss the Amended Complaint (related document(s)93, 94) Filed by 356W58 Ground Lessor LLC (Attachments: # 1 Certificate of Service) (McGuire, Matthew) (Entered: 08/13/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/473986329/","id":473986329,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/489472958/","id":489472958,"tags":[],"absolute_url":"/docket/72070200/101/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-08-11T07:35:03.153715-07:00","date_modified":"2026-09-09T16:09:29.135096-07:00","sha1":"45299b1b9c7ee617bc15748b120acc70eefc4809","page_count":2,"file_size":178280,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.101.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.101.0.pdf","ia_upload_failure_count":1,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 101 Filed 08/11/26 Page 1 of 2\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\nIn re: Chapter 11\n\nHudson 1701/1706, LLC, et al., 1 Case No. 25-11853 (KBO)\n (Jointly Administered)\n Debtor.\n\nHUDSON 1701/1706, LLC, a Delaware\nlimited liability company; and HUDSON\n1702, LLC, a Delaware limited liability\ncompany\n Adv. Pro. No. 25-52471 (KBO)\n Plaintiffs,\nv.\n Related to Adv. D.I. 91\n356W58 Ground Lessor LLC, a Delaware\nlimited liability company,\n\n\n NOTICE OF FILING OF REDLINE OF AMENDED COMPLAINT\n\n\n PLEASE TAKE NOTICE that on December 22, 2025, the Debtors filed a Complaint\n\nin the above captioned Adversary Proceeding [Adv. D.I. 1] (the \u201cComplaint\u201d).\n\n PLEASE TAKE FURTHER NOTICE that on June 10, 2026, the Debtors filed an\n\nAmended Complaint [Adv. D.I. 91] (the \u201cAmended Complaint\u201d).\n\n PLEASE TAKE FURTHER NOTICE that attached hereto as Exhibit A is a redline\n\ncomparing the Amended Complaint to the Complaint as requested by the Court.\n\n [Signature Page to Follow]\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 mailing address is c/o\nFTI Consulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the Americas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 101 Filed 08/11/26 Page 2 of 2\n\n\n\n\nDated: August 11, 2026 CHIPMAN BROWN CICERO & COLE, LLP\n\n /s/ William E. Chipman, Jr.______________\n William E. Chipman, Jr. (No. 3818)\n Mark D. Olivere (No. 4291)\n Aaron J. Bach (No. 7364)\n Alison R. Maser (No. 7430)\n Hercules Plaza\n 1313 North Market Street, Suite 5400\n Wilmington, Delaware 19801\n Telephone: (302) 295-0191\n Email: chipman@chipmanbrown.com\n olivere@chipmanbrown.com\n bach@chipmanbrown.com\n maser@chipmanbrown.com\n -and-\n\n BOIES SCHILLER FLEXNER LLP\n Robert Gordon (admitted pro hac vice)\n Michael M. Fay (admitted pro hac vice)\n Jenny H. Kim (admitted pro hac vice)\n Jeffrey Waldron (admitted pro hac vice)\n Katherine Zhang (admitted pro hac vice)\n 55 Hudson Yards\n New York, New York 10001\n Telephone: (212) 446-2300\n Email: rgordon@bsfllp.com\n mfay@bsfllp.com\n jkim@bsfllp.com\n jwaldron@bsfllp.com\n kzhang@bsfllp.com\n\n Counsel for Debtors and Debtors in Possession\n\n\n\n\n -2-\n\f","ocr_status":2,"date_upload":"2026-09-04T11:19:41.545649-07:00","document_number":"101","attachment_number":null,"pacer_doc_id":"042023132039","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Exhibit","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492580759/","id":492580759,"tags":[],"absolute_url":"/docket/72070200/101/1/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T11:19:32.981484-07:00","date_modified":"2026-09-09T16:09:23.519258-07:00","sha1":"aff89ab614193b12410d57b2bce8fee48cddb780","page_count":67,"file_size":1333970,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.101.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.101.1.pdf","ia_upload_failure_count":1,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 1 of 67\n\n\n\n\n EXHIBIT A\n\n\n\n\n -3-\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 2 of 67\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\n In re: Chapter 11\n\n HUDSON 1701/1706, LLC, et al.,1\n Case Nos. 25-11853(KBO)\n Debtors.\n\n (Jointly Administered)\n\n HUDSON 1701/1706, LLC, a Delaware limited\n liability company; and HUDSON 1702, LLC, a Adv. Proc. No. 25-_____25-\n Delaware limited liability company, 52471(KBO)\n\n\n Plaintiffs,\n\n v.\n\n\n 356W58 GROUND LESSOR LLC, a Delaware\n limited liability company,\n\n\n\n Defendant.\n\n\n\n COMPLAINT\n\n\n\n\n AMENDED COMPLAINT\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 mailing address is c/o\nFTI Consulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the Americas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 3 of 67\n\n\n\n\n TABLE OF CONTENTS\n\nINTRODUCTION .......................................................................................................................... 1\n\nPARTIES ........................................................................................................................................ 6\n\nJURISDICTION AND VENUE ..................................................................................................... 7\n\nFACTUAL ALLEGATIONS ......................................................................................................... 7\n\n A. History of the Hudson Hotel Building .................................................................... 7\n\n B. Financing The Project ............................................................................................. 9\n\n C. Initial Construction Efforts ................................................................................... 14\n\n D. The Fourth Amendment ........................................................................................ 16\n\n E. The Debtors Were Insolvent At All Relevant Times ............................................ 17\n\nFACTS SUPPORTING RECHARACTERIZATION .................................................................. 18\n\n A. The Debtors Paid Almost $39 Million Directly To The Seller For The\n Purchase Of The Condominium Units .................................................................. 19\n\n B. The Ground Lease Expressly Recognizes That MSP Was Providing\n Financing To The Capital Stack For The Debtors\u2019 Acquisition Of The\n Property And Development of the Project ............................................................ 19\n\n C. The Property Was Purchased Solely In Connection With The Debtors\u2019\n Conversion Project ................................................................................................ 20\n\n D. The Ground Lease\u2019s \u201cRents\u201d Are Based On Targeted Investor Yields And\n Not Market Rental Rates ....................................................................................... 20\n\n E. The Ground Lease Required An Extraordinary Non-Rent Payment With\n 94 Years Left On Its Term .................................................................................... 21\n\n F. The Fourth Amendment Requires An Even Larger Non-Rent Payment\n With 89 Years Left On The Ground Lease\u2019s Term .............................................. 22\n\n G. The Extraordinary Payments Cannot Be, And Are Not, Treated As Rent In\n The Ground Lease Or Fourth Amendment ........................................................... 23\n\n H. The Ground Lease Is Not A Ground Lease: Neither MSP Nor The\n Debtors Ever Owned The Land Under The Condominium Units ........................ 25\n\n I. So-Called Modern Institutional Ground Leases, Like The Ground Lease\n Here, Are Admitted In The Industry To Be At Risk Of Recharacterization ....... 25\n\n i\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 4 of 67\n\n\n\n\n J. Other Considerations ............................................................................................ 26\n\nFACTS SUPPORTING FRAUDULENT TRANSFER ............................................................... 28\n\nDEBTORS\u2019 REQUESTED RELIEF ............................................................................................ 29\n\nCAUSES OF ACTION ................................................................................................................. 32\n\n COUNT I: Declaratory Judgment That The Ground Lease Is Not a True Lease\n Under 11 U.S.C. \u00a7 365 ...................................................................................................... 32\n\n COUNT II: Avoidance of Fraudulent Transfer (Fourth Amendment) Pursuant to\n 11 U.S.C. \u00a7 548(a)(1)(B) \u2013 Constructive Fraud................................................................ 33\n\n COUNT III: Avoidance of Fraudulent Transfer (Fourth Amendment) Pursuant to\n 11 U.S.C. \u00a7 544(b)(1) \u2013 New York Uniform Voidable Transactions Act ........................ 34\n\n COUNT IV: Recovery of Fraudulent Transfer Pursuant to 11 U.S.C. \u00a7\u00a7\n 544(b)(1), 548(a)(1)(B) and 550(a)................................................................................... 35\n\n COUNT V: Disallowance of Defendant\u2019s Claims Pursuant to 11 U.S.C. \u00a7 502(d) ......... 35\n\nPRAYER FOR RELIEF ............................................................................................................... 36\n\n\n\n\n ii\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 5 of 67\n[Different first page link-to-previous setting changed from off in original to on in modified.].\n\n\n Debtors and plaintiffs Hudson 1701/1706, LLC and Hudson 1702, LLC (together, the\n\n\u201cDebtors\u201d or \u201cPlaintiffs\u201d), the debtors and debtors in possession in the above-captioned jointly\n\nadministered chapter 11 bankruptcy cases (the \u201cChapter 11 Cases\u201d), as and for their Amended\n\nComplaint in the above-captioned adversary proceeding (the \u201cAdversary Proceeding\u201d) against\n\nDefendant 356W58 Ground Lessor LLC (the \u201cDefendant\u201d), an affiliate of MSP Capital\n\nManagement, L.L.C., d/b/a Montgomery Street Partners (together with the Defendant, \u201cMSP\u201d),\n\nallege as follows:\n\n INTRODUCTION\n\n 1. This action involves a Purported Ground Lease, as defined and described below,\n\nentered into between Plaintiffs and Defendant on May 4, 2022, together with the amendments\n\nthereto in connection with the financing of Plaintiffs\u2019 planned redevelopment of the former Hudson\n\nHotel in New York, New York (the \u201cHudson\u201d)2within the real property known as 353 West 57th\n\nStreet Condominium and by the street number 353-361 West 57 th Street a/k/a 358-366 West 58th\n\nStreet, New York, New York (the \u201cProperty\u201d). Adversary Proceeding is commenced pursuant to:\n\n(a) the equitable doctrine of lease recharacterization, and (b) the law of fraudulent transfer, as\n\nprovided for in sections 544, 548, and 550 of title 11 of the United States Code (the \u201cBankruptcy\n\nCode\u201d), and under relevant state law. Each of these bodies of law \u2013 recharacterization and\n\nfraudulent transfer \u2013 exists in bankruptcy proceedings for one primary purpose: to avoid and\n\nunwind transactions that would result in inequitable forfeitures of estate assets that benefit one\n\ncreditor to the detriment of other creditors.\n\n\n\n\n2\n As used herein, the term \u201cHudson\u201d refers, collectively, to Condominium Units 1701, 1702, and 1706 in the Property\nas further detailed below and the Unit numbers for the Condominium Units refer to the Lot numbers on the tax maps\nof The City of New York..\n\n[Different first page link-to-previous setting changed from off in original to on in modified.].\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 6 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 2. With respect to recharacterization, the lease at issue here is a ground lease executed\n\nby the Debtors and Defendant on May 4, 2022 (the \u201cGround Lease;\u201d a copy of the Ground Lease\n\nis attached hereto as Exhibit A). The terms of the Ground Lease, both in its initial form and as\n\namended, make clear that it is not an ordinary agreement between a lessor and lessee. First, unlike\n\na traditional lease agreement:\n\n (a) the Ground Lease was executed as part of a transaction (the \u201cAcquisition\n\n Transaction\u201d) which required the Debtors to pay almost $39 million to a\n\n subsidiary of Cain International, Inc. (\u201cCain\u201d), the seller, as part of the\n\n purchase price for the acquisition of the three condominium units in the\n\n former Hudson Hotel in New York City that are the subject of the Ground\n\n Lease (the \u201cProperty\u201d);\n\n (b) the Ground Lease affirms, through an attached \u201cProject Budget,\u201d that\n\n MSP\u2019s role in the Acquisition Transaction, and thus the purpose of the\n\n Ground Lease, was to provide acquisition financing as part of the capital\n\n stack for the Debtors\u2019 acquisition and conversion of the Property into a\n\n multifamily apartment complex (the \u201cProject\u201d);\n\n (c) the Property \u2013 in conformance with MSP\u2019s own investment guidelines \u2013\n\n was purchased specifically for the Debtors\u2019 use in completing the Project;\n\n (d) the Ground Lease required an extraordinary payment \u2013 called a \u201cRight-Size\n\n Payment\u201d \u2013 in the fifth year of the lease if short-term income projections\n\n were not met (akin to a loan\u2019s coverage ratio), even if rent was being timely\n\n paid;\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 2\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 7 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n (e) MSP\u2019s representatives have conceded that \u201crents\u201d under the Ground Lease\n\n were calculated to provide its investors with a particular rate of return, not\n\n by reference to market rental rates;\n\n (f) the Defendant, as the ground lessor, does not even own \u2013 and thus cannot\n\n possibly lease \u2013 the \u201cground\u201d (i.e., the land on which the Property sits); and\n\n (g) the Ground Lease contains additional provisions often found in leases that\n\n courts have determined are not \u201ctrue leases\u201d.\n\n 3. These financing characteristics were structural features of the Acquisition\n\nTransaction and the Ground Lease from its inception in May 2022. MSP and its affiliate GLR\n\n(defined below) marketed their ground lease structure to investors as an \u201cinterest only, 99-year\n\nfinancing product intended to maximize Sponsor returns and address capital requirements for core\n\nto opportunistic real estate investments\u201d (emphasis added)\u2014the language of lending, not leasing.\n\nMSP\u2019s own correspondence to the Debtors described the Ground Lease as providing an\n\n\u201cexceptionally low cost of capital\u201d\u2014again, the language of lending, not leasing.\n\n 4. Second, the Ground Lease contains unique non-rent terms that are also not found\n\nin traditional ground leases. For example, the Ground Lease, as amended, necessitates an\n\nextraordinary, non-rent $65 million Right-Size Payment by the Debtors in 2032 \u2013 i.e., only three\n\nyears after the Project is scheduled to be completed. The Ground Lease expressly recognizes that\n\nthis sum cannot be treated as rent under the Internal Revenue Code (the \u201cIRC\u201d), and thus calls this\n\namount a loan from the Debtors to MSP. In fact, the Ground Lease contains four different\n\nextraordinary, non-rent payments that are ultimately treated as \u201cloans\u201d from the Debtors to MSP\n\n(and not as pre-paid rent). Under a true ground lease, a lessor collects agreed-upon rent and has a\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 3\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 8 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nreversionary interest when the lease term expires; the lessor does not collect tens of millions of\n\ndollars in payments that defy the IRC\u2019s treatment of rent and are called loans.\n\n 5. Further, the $65 million non-rent, Right-Size Payment was designed to arise at a\n\ntime when the Property would almost certainly not have the income to pay it. Indeed, the Debtors\n\nforecast that in 2032 \u2013 even if the Project proceeds according to current plans \u2013 they will not have\n\nthe revenue to pay, or the ability to finance, a $65 million payment. (Once again, this payment is\n\nin addition to annual rent of $8.75 million.) Accordingly, without recharacterization, the Debtors\n\nwill be compelled to reject the Ground Lease, resulting in a complete forfeiture to MSP of the\n\nDebtors\u2019 only asset, the Project, with a current value of well over $200 million. Put another way,\n\nthrough rejection or termination of the Ground Lease, even though MSP contributed only 43\n\npercent of the total financing for the acquisition and development of the Property, MSP would\n\nreceive 100 percent of the value: both the Property and the Project, in which approximately $216\n\nmillion has been invested to date. For MSP, it would be an enormous and unprecedented windfall\n\njust four years into a 99-year purported lease. For all other creditors in the Chapter 11 Cases, it\n\nwould result in effectively no recovery whatsoever.\n\n 6. The well-established bankruptcy law governing lease recharacterization precludes\n\nsuch a lopsided result. As the Second Circuit Court of Appeals recognized in Liona Corp., N.V.\n\nv. PCH Assocs. (In re PCH Assocs.), 804 F.2d 193, 200 (2d. Cir. 1986)\n\n(\u201cPCH I\u201d):\n\n If security transactions, loans and other financing arrangements can be\n couched in lease terms, and can thereby be assumed by the bankrupt estate,\n the \u2018lessor\u2019 gains a distinct advantage at the expense of other creditors\n without a concomitant benefit to the bankrupt estate. This is especially\n apparent in the case at bar. If successful, Liona would enjoy the benefit of\n its contract with PCH to the detriment of others having valid claims against\n the bankrupt\u2019s estate. However, if there is no true lease, Liona should not\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 4\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 9 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n be permitted to escape the consequences of investor/creditor status by\n invoking the labels of \u2018landlord\u2019 and \u2018lease.\u2019\n 2. This Complaint seeks recharacterization of the Purported Ground Lease,\n which, while disguised as a \u201clease,\u201d does not resemble a ground lease, and certainly\n not the economic realities of a true lease by any definition of that term. Rather, the\n sum and substance of the Purported Ground Lease is that of a financing\n arrangement. This action follows the Plaintiffs\u2019 review of the Purported Ground\n Lease, as well as the facts and circumstances that led to the execution of the\n Purported Ground Lease, all of which overwhelmingly indicate that the Purported\n Ground Lease is a disguised financial product. Plaintiffs initially sought to\n recalibrate the Purported Ground Lease to reflect the true value of the use of the\n Hudson directly with the Defendant. This effort took place through reasonable,\n good-faith discussions, but Defendant rejected every single attempt. Plaintiffs have\n been left with little choice but to seek to redefine the Purported Ground Lease to\n reflect its actual substance and purpose and avoid Defendant\u2019s attempt to take\n advantage of the favorable treatment of \u201cleases\u201d under the Bankruptcy Code to the\n detriment of the Plaintiffs\u2019 and their other creditors.\n 3. As detailed herein, the Purported Ground Lease embodies many of the hallmarks\n\nof a disguised financing agreement, including, inter alia, that; (a) the \u201crent\u201d payments were\n\ncalculated to ensure Defendant saw a return on its investment and were not related to the market\n\nvalue of the tenancy; (b) it required an upfront payment (so-called \u201cprepaid rent\u201d) in excess of $36\n\nmillion, essentially equivalent to an 18% down payment or an equity contribution; (c) it requires\n\na \u201cRight-Size Payment\u201d equivalent to an equity cure provision in a loan; (d) Defendant purchased\n\nthe Hudson specifically as part of an arrangement to finance Plaintiffs\u2019 acquisition and\n\nredevelopment of the Hudson; and (e) it burdens Plaintiffs with all of the obligations typically\n\nassociated with outright ownership. Taken together, it is clear that the Parties did not intend to\n\nenter a true lease and that Defendant was instead financing the purchase of the Hudson as part of\n\nPlaintiffs\u2019 redevelopment plan. Indeed, Defendants themselves touted their purported ground\n\nleases as a \u201cfinancing product\u201d in their contemporaneous communications and advertisements\n\nconcerning the Purported Ground Lease.\n\n 7. These considerations are particularly significant in these Chapter 11 Cases, where\n\nthe absence of lease recharacterization will result in the forfeiture of everything the Debtors own\n[Link-to-previous setting changed from off in original to on in modified.].\n 5\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 10 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nand the massive investments the Debtors have made. As the United States Supreme Court has\n\nheld, a \u201cbankruptcy court does not look with favor upon forfeiture clauses in leases. They are\n\nliberally construed in favor of the bankrupt lessee so as not to deprive the estate of property which\n\nmay turn out to be a valuable asset.\u201d Finn v. Meighan, 325 U.S. 300, 301 (1945). See also Jones\n\nv. N.Y. Guaranty and Indemnity Co., 101 U.S. 622, 628 (1879) (\u201cA court of equity abhors\n\nforfeitures, and will not lend its aid to enforce them\u201d). MSP should not be allowed to walk away\n\nwith both the Property and an additional $216 million \u201cprize\u201d where the lease in question is not a\n\ntrue lease.\n\n 4.8. Accordingly, Plaintiffs seek a declaratory judgment that the Purportedin this\n\nAmended Complaint the Debtors seek an order declaring that the Ground Lease is not a \u201ctrue\n\nlease,\u201d but rather is a disguised financing arrangement. Thus, the interests created by the Purported\n\nGround Lease are properly excluded from application of Bankruptcy Code sections 365 and 1123.\n\nRather, the Purported Ground Lease transaction is subject to Section 506 under section 365 of the\n\nBankruptcy Code. As the PCH I court recognized, in a recharacterization action like this one, the\n\ninitial issue under section 365 of the Bankruptcy Code is whether the lease is a \u201ctrue\u201d or \u201cbona\n\nfide\u201d lease; if it is not, then section 365 does not govern the instrument:\n\n 5. In addition, Plaintiffs assert that the Fourth Amendment to the Purported Ground\n\nLease was entered at a time when Plaintiffs were insolvent or rendered Plaintiffs insolvent and for\n\nless than reasonably equivalent consideration received by Plaintiffs in exchange and is avoidable\n\nunder Bankruptcy Code sections 548 and 544 and applicable non-bankruptcy law and recoverable\n\nunder section 550 of the Bankruptcy Code.\n\n We interpret section 365(d)(3), (4) of the Bankruptcy Code to apply solely\n to a \u201ctrue\u201d or \u201cbona fide\u201d lease. The Ground Lease is not, in our opinion, a\n true lease as contemplated therein, and we find that determination\n dispositive of the case. It is unnecessary, therefore, to identify the\n[Link-to-previous setting changed from off in original to on in modified.].\n 6\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 11 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n transaction as a joint venture, security agreement, subordinated financing,\n or other investment scheme. Suffice it to say that it is not a bona fide lease\n for purposes of the Bankruptcy Code.\n PARTIES\n804 F.2d at 198-99.\n\n 9. The Debtors also seek a further declaration, in a supplemental proceeding, that the\n\nrelationship between the Debtors and the Defendant is more properly characterized as one of two\n\nrelationships: a lender/borrower financing or a tenancy in common. Such a supplemental\n\nproceeding would also address the nature, priority, and extent of the Defendant\u2019s claim or equity\n\ninterest arising out of that relationship, pursuant to Bankruptcy Code sections 502 and 506, among\n\nothers, and Rules 3012 and 7001(b) and (i) of the Federal Rules of Bankruptcy Procedure (the\n\n\u201cBankruptcy Rules\u201d), among others. Because such a determination may also directly affect the\n\ninterests of third-party creditors who may assert an interest in the Property \u2013 including Parkview\n\nFinancial REIT, LP (\u201cParkview Financial\u201d), mechanic\u2019s lienors, and perhaps other creditors \u2013\n\nthose creditors should be allowed to intervene and assert their interests. 2\n\n\n\n PARTIES\n\n 6.10. Plaintiff/Debtor Hudson 1701/1706, LLC is a limited liability company organized\n\nand existing under the laws of the State of Delaware, with offices at 1166 Avenue of the Americas,\n\n15th Floor, New York, NY 10036. Plaintiff/Debtor Hudson 1701/1706, LLC is a debtor in the\n\nabove-captioned casesand debtor in possession in the Chapter 11 Cases, having filed a voluntary\n\npetition for relief under chapter 11 of title 11 of the United StatesBankruptcy Code on October 22,\n\n2025 (the \u201cPetition Date\u201d).\n\n\n2\n The Debtors also seek a declaratory judgment that the Fourth Amendment (defined below) is avoidable\nand avoided as a fraudulent transfer because it was executed at a time when the Debtors were insolvent and\ninadequately capitalized and the Debtors received no reasonably equivalent consideration for the additional\npayments required by that Amendment.\n[Link-to-previous setting changed from off in original to on in modified.].\n 7\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 12 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 7.11. Plaintiff/Debtor Hudson 1702, LLC is a limited liability company organized and\n\nexisting under the laws of the State of Delaware, with offices at 1166 Avenue of the Americas,\n\n15th Floor, New York, NY 10036. Plaintiff/Debtor Hudson 1702, LLC is a debtor in the above-\n\ncaptioned casesand debtor in possession in the Chapter 11 Cases, having filed a voluntary petition\n\nfor relief under chapter 11 of title 11 of the United StatesBankruptcy Code on the Petition Date.\n\n 8. Nonparty PV Hudson, LLC (\u201cPV Hudson\u201d) is a limited liability company organized\n\nand existing under the laws of the State of Delaware and is the current holder of 100% of the\n\nlimited liability company membership interests in each of the Plaintiffs.\n\n 9.12. Nonparty CSC Hudson, LLC (\u201cCSC Hudson\u201d) is a limited liability company\n\norganized and existing under the laws of the State of Delaware and is the former holder of 100%\n\nof the limited liability company membership interests in each of the PlaintiffsDebtors.\n\n 10.13. Upon information and belief, nonparty MSP Capital Management, L.L.C., d/b/a\n\nMontgomery Street Partners (\u201cMSP\u201d), is a limited liability company organized and existing under\n\nthe laws of the State of Texas with its principal offices at 2801 N. Harwood Street, Suite 1200,\n\nDallas, Texas 75201.\n\n 11.14. Upon information and belief, nonparty The Ground Lease REIT, Inc. (\u201cGLR\u201d) is\n\na real estate investment trust with its principal offices at 2801 N. Harwood Street, Suite 1200,\n\nDallas, Texas 75201. Upon information and belief, GLR was formed by and is a subsidiaryan\n\naffiliate of MSP.\n\n 12.15. Upon information and belief, Defendant 356W58 Ground Lessor LLC is a limited\n\nliability company organized and existing under the laws of the State of Delaware, with its principal\n\noffices at 2801 N. Harwood Street, Suite 1200, Dallas, Texas 75201. Upon information and belief,\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 8\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 13 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nthe Defendant 356W58 Ground Lessor LLC was formed by GLR as a special purpose entity for\n\nthe purposes of entering into the Purported Ground Lease with Plaintiffsthe Debtors.\n\n JURISDICTION AND VENUEJURISDICTION AND VENUE\n\n 13.16. This actionAdversary Proceeding is brought pursuant to the Declaratory Judgment\n\nAct, 28 U.S.C. \u00a7\u00a7 2201-02, sections 105, 363, 364 and 365, 502, 506, 544, 548, and 550, and\n\n502(d) of title 11 of the United States Code (the \u201c of the Bankruptcy Code\u201d), and Bankruptcy\n\nRules 3012, 7001(a), 7001(2) and 7001(9) of the Federal Rules of Bankruptcy Procedureb) and\n\n(i), in order to determine the respective rights of the Plaintiffs and the Defendant concerning the\n\nPurported Ground Lease described herein, which in turn relates to real property of Plaintiffsand\n\nthe Property.\n\n 14.17. This Court has jurisdiction over the above-captioned bankruptcy cases,Chapter 11\n\nCases, the Debtors, property of the Debtors\u2019 estates, and Defendants and this adversary\n\nproceedingthe Defendant and the Adversary Proceeding pursuant to 28 U.S.C. \u00a7\u00a7 157(a) and\n\n1334(a).\n\n 15.18. This is a core proceeding under 28 U.S.C. \u00a7 157(b)(2).\n\n 16.19. Venue is proper in this Court pursuant to 28 U.S.C. \u00a7\u00a7 1408 and 1409.\n\n 17.20. Pursuant to Fed. R. Bankr. P.Bankruptcy Rule 7008(a) and Rule 7008-1 of the\n\nLocal Rules of the United States Bankruptcy Court for the District of Delaware (, the \u201cLocal\n\nRules\u201d), PlaintiffsDebtors consent to the Court\u2019s entry of a final judgment or order with respect to\n\nthis adversary proceeding if it is determined that the Court, absent consent of the parties, cannot\n\nenter final orders or judgments consistent with Article III of the United States Constitution.\n\n FACTUAL ALLEGATIONS\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 9\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 14 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n A. Background of Transaction\n\nA. History of the Hudson Hotel Building\n\n 18.21. Plaintiffs were formed in March 2022 to redevelop and operate certain The\n\nChapter 11 Cases and this Adversary Proceeding involve three commercial condominium units\n\nwithin the real propertybuilding known as 353 West 57th Street Condominium and by the street\n\nnumber 353-361 West 57th Street a/k/a 358-366 West 58th Street, New York, New York (the\n\n\u201cHudson Hotel Building\u201d or \u201cBuilding\u201d).\n\n 19.22. The buildingHudson Hotel Building was first constructed in 1929 as the American\n\nWomen\u2019s Association clubhouse and a residence for young women. It contained 1,250 rooms,\n\nalong with a swimming pool, restaurant, and gymnasium. Following the American Women\u2019s\n\nAssociation\u2019s bankruptcy in 1941, the buildingBuilding was converted into the Henry Hudson\n\nHotel.\n\n 20.23. On or aroundabout April 11, 1985, and pursuant to a declaration under Article 9-\n\nB of the Real Property Law of the State of New York, the real property located at 353 West-361\n\nWest 57th StreetHudson Hotel Building was declared a commercial condominium building known\n\nas the 353 West 57th Street Condominium (the \u201cCondominium\u201d). The plan for the Condominium\n\nwas subsequently amended on several occasions (as amended, the \u201cCondominium Declaration\u201d).\n\nThe Condominium Declaration, among other things, establishes a condominium association (the\n\n\u201cCondominium Association\u201d) and identifies certain common elements (the \u201cCommon\n\nElements,\u201d) owned by the Condominium Association -- including the land, and each of the\n\nCondominium Unit owners has a specified undivided interest in such Common Elements. upon\n\nwhich the Building is located. In 1997, certain of the condominium units were purchased by the\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 10\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 15 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nMorgans Hotel Group, converted to a hotel by renowned hotelier Ian Schrager, and renamed \u201cThe\n\nHudson.\u201d\n\n 21.24. The Hudson Hotel Building, pursuant to the Condominium Declaration, consists\n\nof six units numbered Unit 1701 through Unit 1706; however, only Units 1701, 1702 and 1706 are\n\nsubject to the Purported Ground Lease (as defined herein). Unit 1701 (the \u201cEBC Unit\u201d) comprises\n\n203,585 square feet of the PropertyHudson Building, including portions of the cellar, sub-cellar\n\nfirst floor and floor 26, the entire first mezzanine and floors numbered 2 through 9, and 25, as well\n\nas certain elevators, entranceways, windows and other mechanical areas as more particularly\n\ndescribed in the Condominium Declaration. Unit 1702 (the \u201cHotel Unit\u201d) comprises 216,937\n\nsquare feet of the PropertyHudson Building, including portions of the cellar, sub-cellar, first floor\n\nand floors 23, 24 and 26, and the entire floors 11 through 22, as well as certain elevators,\n\nentranceways and windows and other mechanical areas as more particularly described in the\n\nCondominium Declaration. Unit 1706 comprises 17,981 square feet inof the\n\nCondominiumHudson Building and consists of the 10th floor of the Property.3The \u201cHudson\u201d\n\nrefers, collectively, to Condominium that Building. 3 Units 1701, 1702 and 1706 in the are\n\ncollectively referred to herein as the \u201cCondominium Units\u201d or the \u201cProperty\u201d.\n\n\n\n\n3\n For completeness, Unit 1703 is a supermarket unit on the first floor of the Property that comprises 18,236 square\nfeet, Unit 1704 is a store unit on the first floor of the Property that comprises 1,598 square feet, and Unit 1705\ncomprises 3,821 square feet in the Property; it is the penthouse unit on portions of the 23rd and 24th floors of the\nProperty, including the 24th floor roof.\n3\n For completeness, Unit 1703 is a supermarket unit on the first floor of the Building and comprises\n18,236 square feet. Unit 1704 is a store unit on the first floor of the Building and comprises 1,598\nsquare feet. And Unit 1705 comprises 3,821 square feet in the Building; it is the penthouse unit\non portions of the 23rd and 24th floors of the Building, including the 24th floor roof.\n[Link-to-previous setting changed from off in original to on in modified.].\n 11\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 16 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 22. In 1997, the building was purchased by the Morgans Hotel Group. Following a\n\nthree-year, $125 million renovation, certain condominium units were converted to hotel use by\n\nrenowned hotelier Ian Schrager and renamed \u201cThe Hudson.\u201d\n\n 23. Plaintiffs planned to redevelop the Hudson as a multifamily residential property\n\noriginally anticipated to include 440 market-rate rental units complete with commercial space and\n\na penthouse.\n\n 24. CSC originally entered into a Purchase and Sale Agreement dated February 3, 2022\n\nto purchase Unit 1701 and Unit 1702 and lease Unit 1706, with an option to later purchase Unit\n\n1706 from a subsidiary of Cain International, a real estate investment management company, for\n\n$207.5 million.\n\n 25. Upon information and belief, CSC sought out alternative, additional financing for\n\nits redevelopment plans and entered into discussions with GLR, a real estate investment trust\n\nformed by MSP, a commercial real estate investment firm. Upon information and belief, CSC was\n\nattracted to GLR and MSP\u2019s \u201cground lease\u201d scheme, which was explicitly advertised as a\n\n\u201cfinancing product\u201d as described by MSP and GLR directly below. 4\n\n\n\n\n4\n See THE GLR GROUND LEASE: A COMPELLING FINANCING SOLUTION (publicly available at\nhttps://glreit.com/wp-content/uploads/2023/04/GLR_Flyer.pdf) (last accessed December 17, 2025).\n[Link-to-previous setting changed from off in original to on in modified.].\n 12\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 17 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nB. Financing The Project\n\n 25. In or about 2022, CSC Hudson initiated the Project, a plan to convert the Property\u2019s\n\nover 800 hotel rooms into a multifamily residential apartment complex. As part of the Project, the\n\nDebtors were formed in March 2022 to purchase, redevelop, and operate the Condominium Units.\n\n 26. CSC then assigned the Purchase and Sale Agreement to Defendant, a special\n\npurpose entity formed by GLR.\n\n 27.26. On May 4February 3, 2022, Defendant acquired Unit 1701 and Unit 1702, along\n\nwith a lease and purchase option for Unit 1706, and simultaneously entered into the purported\n\n\u201cGround Lease\u201d dated May 4, 2022 with Plaintiffs (as amended, the \u201cPurported Ground Lease\u201d),\n\npursuant to which Plaintiffs occupy the Hudson. A true and correct copy of the Purported Ground\n\nLease is attached hereto as Exhibit A. On or around January 3, 2023, Defendant acquired Unit\n\n1706. CSC Hudson, by and through its principals, Salomon and Alberto Smeke (together, the\n\n\u201cSmekes\u201d), entered into an agreement with Cain to purchase Units 1701 and 1702, and sub-lease\n\nUnit 1706, with an option to later purchase Unit 1706 (the \u201cPurchase Agreement\u201d). The total\n\npurchase price under the Purchase Agreement related to the Condominium Units was\n\n$206,850,000.\n\n 27. At the time that CSC Hudson entered into the Purchase Agreement with Cain, the\n\nSmekes knew that they would need to obtain financing for the Project. To identify possible partners\n\nfor acquisition and project financing, CSC Hudson engaged Meridian Capital Group\n\n(\u201cMeridian\u201d), an investment broker that CSC Hudson had retained for past projects.\n\n 28. Meridian first contacted MSP on January 31, 2022, regarding the opportunity to\n\nfinance the acquisition of the Condominium Units. MSP and its affiliate, GLR, marketed a\n\nfinancing option which they characterized as a \u201cground lease,\u201d but that was touted as freeing up\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 13\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 18 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ninitial capital for construction purposes. In a recent podcast interview, 4 Max Nipon (\u201cNipon\u201d),\n\nan MSP principal, has described MSP\u2019s ground lease product as \u201ceffectively an alternative form\n\nof financing to the market,\u201d explaining that MSP\u2019s value proposition is that \u201c[w]e can, in\n\ncombination with a leasehold loan, provide a lower blended cost of capital through the debt stack.\n\nWe can oftentimes engineer incremental leverage through the alchemy of the ground lease plus\n\nthat leasehold loan.\u201d Nipon also described MSP\u2019s position in the capital structure as that of a\n\nlender, not a landlord, noting that leasehold lenders \u201clook at us as effectively a type of A-note\u201d\n\nand that MSP is \u201cimproving the debt stack for [the] borrower.\u201d Throughout the interview, Nipon\n\ncompared the ground lease not to other lease products, but to preferred equity and mezzanine debt,\n\nstating that \u201ceveryone is jumping at the pref mez solution to fill gaps. I think the ground lease is a\n\ngreat option for that.\u201d\n\n 29. Consistent with this marketing, MSP led the Smekes to believe that a ground lease\n\nwould offer less expensive acquisition financing for the Project, and that the monthly \u201crent\u201d\n\npayments would likely be lower than monthly debt service payments on a traditional acquisition\n\nfinancing loan. As Alberto Smeke said, he viewed the Ground Lease as an \u201cinterest-only loan.\u201d\n\n 30. Representatives of MSP were first introduced to the Smekes via email on February\n\n5, 2022 (i.e., two days after CSC Hudson entered into the Purchase Agreement), and proceeded to\n\nnegotiate a term sheet over the following weeks, which term sheet was executed on February 24,\n\n2022. Simultaneously, CSC Hudson was negotiating with Parkview Financial to provide\n\nconstruction and development loans for the Project in the amount of $207 million.\n\n\n\n\n4\n See https://podcasts.apple.com/us/podcast/ep-5-ground-lease-financing-max-nipon-montgomery-\nstreet/id1729873750?i=1000652163453\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 14\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 19 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 31. Tellingly, the requirement of a Right-Size Payment was not mentioned in MSP\u2019s\n\nterm sheet with the Debtors. MSP first raised it in April 2022, with Luk Pak (\u201cPak\u201d), an MSP\n\npartner, recognizing that MSP needed to be \u201cvery careful when and how we deliver this message.\u201d\n\nMSP\u2019s Nipon agreed:\n\n It will have to be a delicate conversation, but I think we can couch it as a\n necessary protection and one that, if they hit their business plan, shouldn\u2019t\n be an issue. But if they don\u2019t, we have accommodated them in not defining\n what they must do, just that they must have a business plan and it must\n include preserving our asset\u2019s value, which is materially impacted by virtue\n of a changed use or reduced property cash flow.\n 28. Furthermore, and pursuant to a Closing Agreement between CSC, Defendant, and\n\nPlaintiffs, CSC\u2014not Defendant\u2014was required to pay all the costs ancillary to Defendant\u2019s\n\npurchase of the property, including (i) all taxes; (ii) title insurance premiums; (iii) escrow fees;\n\n(iv) recording fees; (v) other costs or expenses incurred by Defendant in connection with the\n\nclosing (\u201cincluding, without limitation third party due diligence costs and construction consultant\n\nfees incurred by [Defendant]\u201d) up to $350,000; and (vi) $595,000 \u201cin consideration for advisory\n\nand management services\u201d to GLR.\n\n 29. Pursuant to the Purported Ground Lease, Plaintiffs were required to make an\n\nupfront payment to Defendant of $36,850,000 \u201cin connection with [Plaintiffs\u2019] acquisition of the\n\nPersonal Property and [Defendant\u2019s] acquisition of the Leased Premises.\u201d See Ex. A, \u00a7 4 (i). It is\n\nnot clear what \u201cPersonal Property\u201d was actually acquired in this transaction given the Hudson\u2019s\n\nstatus as an abandoned hotel property.\n\n 30. Plaintiffs also received an aggregate $207 million in development and construction\n\nfinancing (the \u201cLoan\u201d) from nonparty Parkview Financial REIT LP (\u201cPrepetition Lender\u201d) to fund\n\nthe redevelopment of the project.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 15\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 20 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 31. MSP touted the transaction in a press release stating that Plaintiffs \u201cutilized our\n\nground lease capital and paired it with leasehold financing to gain control of the asset and\n\nreposition it\u201d and that Defendant\u2019s \u201cground lease paired with leasehold financing provides our\n\ntenant [Plaintiffs] with a compelling execution at a lower blended cost of capital.\u201d 5\n\n 32. The Purported Ground Lease bears the words \u201cGround Lease\u201d but it lacks the\n\nindicia of a ground lease. The term \u201cground lease\u201d typically describes a lease of unimproved land\n\non which improvements are to be built by the tenant or a lease of improved real estate that covers\n\nthe land but not the improvements, which are owned by the tenant. The Purported Ground Lease,\n\nhowever, refers to leases for two Condominium units\u2014Units 1701 and 1702\u2014and a sublease for\n\na third unit, Unit 1706, which was subsequently acquired by Defendant and made part of the\n\nPurported Ground Lease.\n\n 33. As MSP celebrates in its press release, the true essence of the Purported Ground\n\nLease structure was a disguised financing to fund Plaintiffs\u2019 acquisition and construction.\n\n 34. Likewise, GLR touts its ground lease schemes to its investors and potential\n\nborrowers as \u201cA COMPELLING FINANCING SOLUTION\u201d that is a \u201creturn-enhancing\n\nalternative to conventional financing\u201d offering \u201ca highly competitive cost of capital.\u201d 6It further\n\nexplains that the ground lease structure is \u201can interest only, 99 year financing product intended to\n\nmaximize Sponsor returns and address capital requirements for core to opportunistic real estate\n\n\n\n\n5\n MSP July 31, 2022 Press Release, Montgomery Street Partners Utilizes 99-Year Ground Lease Structure to Acquire,\nFacilitate Planned Residential Conversion of the Hudson Hotel in Columbus Circle, Manhattan (publicly available at\nhttps://montgomerystreetpartners.com/news/montgomery-street-partners-utilizes-99-year-ground-lease-structure-to-\nacquire-facilitate-planned-residential-conversion-of-the-hudson-hotel-in-columbus-circle-manhattan/) (last accessed\nDecember 17, 2025).\n6\n See THE GLR GROUND LEASE: A COMPELLING FINANCING SOLUTION (publicly available at\nhttps://glreit.com/wp-content/uploads/2023/04/GLR_Flyer.pdf) (last accessed December 17, 2025).\n[Link-to-previous setting changed from off in original to on in modified.].\n 16\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 21 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ninvestments.\u201d7In short, GLR\u2019s marketing makes clear that its ground lease product is nothing more\n\nthan an alternative financing solution for real estate developers.\n\nB. The Purported Ground Lease\nNeither Pak nor Nipon explained how a short-term change in business plan \u201cimpacts\u201d anything\n\nunder the 99-year ground lease or justifies triggering a massive non-rent payment from the lessee\n\nand thereby manufacturing a liquidity crisis where, as here, the rent was still being paid. The Right-\n\nSize Payment was not about \u201cpreserving value,\u201d but rather about adding a lender-like trigger for\n\ncalling a default under the Ground Lease long before the end of its term.\n\n 32. On May 3, 2022, CSC Hudson entered into a Closing Agreement (the \u201cClosing\n\nAgreement\u201d; see copy attached as Exhibit B hereto) with Defendant. The Closing Agreement\n\nprovides the mechanics of the Acquisition Transaction, including, among other things, that (a)\n\nCSC Hudson would assign its Purchase Agreement with Cain to Defendant; (b) the Debtors would\n\ncontribute $36.85 million to purchasing Units 1701 and 1702, and leasing Unit 1706, by\n\ntransferring that amount directly to Cain; and (c) the Debtors would execute the Ground Lease\n\nwith the Defendant. (Closing Agreement \u00a7\u00a7 2(a), 3, 7(a)(i)) Under the Closing Agreement, the\n\nDebtors also paid all the closing costs in purchasing Units 1701 and 1702, including taxes, title\n\ninsurance premiums, escrow fees, recording fees, and due diligence costs.\n\n 33. In substance, the Acquisition Transaction is somewhat analogous to a sale-\n\nleaseback transaction: CSC Hudson held the contractual right to purchase the Property, transferred\n\nthat right to MSP, and then the Debtors leased the Property back from MSP under the Ground\n\nLease. Courts have found sale-leaseback transactions to be loan financings rather than true leases.\n\n\n\n\n7\n See id. supra fn. 6.\n[Link-to-previous setting changed from off in original to on in modified.].\n 17\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 22 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nSee Liona Corp., N.V. v. PCH Assocs. (In re PCH Assocs.), 949 F.2d 585 (2d Cir. 1991) (\u201cPCH\n\nII\u201d).\n\n 35. Under the Purported Ground Lease, Plaintiffs hold an undivided interest in the\n\nHudson, which includes Units 1701, 1702, and 1706 of the Condominium. As noted, the Purported\n\nGround Lease does not cover Condominium Unit 1703, Unit 1704, and Unit 1705 on the Property.\n\n 36. Upon execution of the Purported Ground Lease, Plaintiffs were required to make\n\nan upfront payment to Defendant of $36,850,000 or 18% of the purchase price \u201cin connection with\n\n[Plaintiffs\u2019] acquisition of the Personal Property and [Defendant\u2019s] acquisition of the Leased\n\nPremises.\u201d See Ex. A, \u00a7 4 (i). This upfront payment was identified as \u201cPrepaid Rent.\u201d However,\n\nPlaintiffs did not receive any credit for future rent payments owed by Plaintiffs. See id.\n\n 37. Furthermore, and upon information and belief, the $36.85M purchase price for this\n\n\u201cPersonal Property\u201d was an inflated amount that bore no relationship to the value of the \u201cPersonal\n\nProperty\u201d acquired from the Hudson, a former hotel occupied by, among others, SRO tenants.\n\nAccordingly, the $36.85M in consideration for \u201cPersonal Property\u201d or \u201cPrepaid Rent\u201d is more\n\naccurately viewed as a financial down payment or equity contribution from Plaintiffs to Defendant\n\nfor the Hudson.8\n\n 38. Upon information and belief, Defendant denoted the transaction as a \u201cground lease\u201d\n\nto, in part, secure certain state and federal tax advantages for Defendant.\n\n 39. The annual Base Rent for the first five years of the Purported Ground Lease term\n\nwas $6,000,000 (approximately 3% of the purchase price) payable in $500,000 monthly\n\ninstallments. See Ex. A, \u00a7 4(a). The Base Rent is set to increase by 10% in the sixth and eleventh\n\n\n\n\n8\n Under Section 5(b), the upfront payment of \u201cPrepaid Rent\u201d is treated as a loan from Plaintiffs to Defendant for tax\npurposes\u2014a tax advantage benefitting Defendant.\n[Link-to-previous setting changed from off in original to on in modified.].\n 18\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 23 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nlease years and by at least 2% for the proceeding 88 lease years. See id., \u00a7 4(b)-(d). The Base Rent\n\nincreased to $6,400,000 upon Defendant\u2019s purchase of the Tenth Floor Unit (i.e., Condominium\n\nUnit 1706) on January 3, 2023.9A conservative estimate of Defendant\u2019s return on investment over\n\nthe full term of the Purported Ground Lease exceeds approximately 63%.\n\n 40. If Plaintiffs elect to pursue a Fallback Project (as that term is defined in the\n\nPurported Ground Lease)10to amend the original redevelopment plans, Defendant is entitled to a\n\n\u201cRight-Size Payment,\u201d or equity cure, to maintain a satisfactory loan-to-value ratio (\u201cLTV\u201d) and\n\nensure it recoups its investment by no later than the end of the fifth lease year, May 3, 2027. See\n\nEx. A, \u00a7 60(a).11\n\n 41. The amount of the Right-Size Payment is a function of the 12-month trailing net\n\noperating income earned by Plaintiffs from the Hudson. See id., at 26. Notably, the Right-Size\n\nPayment is inversely related to Plaintiffs\u2019 net operating income. See id. As income goes down,\n\nthe Right-Size Payment goes up. 12\n\n 42. The Right-Size Payment is similar to the industry-typical equity cure provision in\n\nfinancing agreements which allows a borrower to inject additional capital by way of equity or\n\nsubordinated debt when the LTV increases beyond a certain threshold to avoid breach of an LTV\n\ncovenant. The Right-Size Payment is nothing more than a disguised equity cure payment that\n\nwould be found in a typical real estate financing arrangement. Instead of the threat of an LTV\n\n\n9\n As discussed below, the Base Rent was increased in connection with the Fourth Amendment to the Purported Ground\nLease.\n10\n Under the Purported Ground Lease, the \u201cFallback Project\u201d is an alternative plan for a \u201cfallback use of the\nImprovements approved by [Defendant]\u201d in connection with the submission of a proposed \u201cFallback Business Plan\u201d\nto Defendant outlining proposed modifications to the project, schedule, financing, etc. See Ex. A at 9-10. The\ntriggering event requiring the submission of the Fallback Business Plan is discussed infra at Section C.\n11\n As discussed below, these dates were adjusted in connection with the Fourth Amendment to the Purported Ground\nLease.\n12\n As discussed below, the potential Right-Size Payment amount was increased as part of the Fourth Amendment to\nthe Purported Ground Lease.\n[Link-to-previous setting changed from off in original to on in modified.].\n 19\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 24 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ncovenant breach, the Purported Ground Lease simply requires Plaintiffs to pay the Right-Size\n\nPayment to keep the Purported Ground Lease at an LTV acceptable to Defendant.\n\n 43. The Purported Ground Lease is also \u201ctriple net,\u201d meaning that the Purported\n\nGround Lease also obligates Plaintiffs to (1) pay all real estate taxes (see Ex. A, \u00a7 7(a)), (2) obtain\n\ninsurance at levels demanded by Defendant and naming Defendant as an additional insured (see \u00a7\n\n15 and (3) keep and maintain the Hudson in good condition, repair, and appearance (see \u00a7 9(a)).\n\nThe Purported Ground Lease also obligates Plaintiffs to obtain all permits and licenses (see \u00a7 7(c)),\n\nkeep the Hudson free and clear of liens (see \u00a7 10), and pay all utilities (see \u00a7 9(f)).\n\n 44. In connection with the Purported Ground Lease, Alberto Smeke Saba and Salomon\n\nSmeke Saba (the \u201cSmekes\u201d), the principals of CSC and former principals of Plaintiffs, entered into\n\na \u201cCarry Guaranty\u201d with Defendant guaranteeing the payment of \u201crent\u201d owed to Defendant, plus\n\ninterest, taxes, insurance premiums and all operating expenses. The Carry Guaranty is attached\n\nhereto as Exhibit B. The Smekes also entered into Completion Guarantees with both Defendant\n\nand Prepetition Lender guaranteeing the completion of construction. The Completion Guarantees\n\nare attached hereto as Exhibits C and D. Notably, these guarantees provide additional security\n\ntypical of what a lender would require.\n\n 45.34. The Purported Ground Lease and purported rent payments are unsubordinated to\n\nthe Loan and other debts. See Ex. A., \u00a7 18(a). This has made it more difficult for Plaintiffs to\n\nobtain additional financing because any such lender would need to be subordinated to Defendant\u2019s\n\ninterest in the Purported Ground Lease and rental payments. was executed the next day, on May\n\n4, 2022. Also on May 4, 2022, the Debtors executed two loan agreements with Parkview Financial\n\nwhich provided the combined $207 million in development and construction financing for the\n\nProject (the \u201cParkview Financial Agreements\u201d; and with the Closing Agreement and Ground\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 20\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 25 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nLease, the \u201cProject Agreements\u201d). Together, the Project Agreements contemplated a\n\nredevelopment of the Property by the Debtors that would involve a conversion of the\n\nCondominium Units to a multi-family apartment complex with approximately 444 one-, two-, and\n\nthree-bedroom units for residential occupancy.\n\n C. Construction Delays and Amendment to Purported Ground Lease\n\n 46. Plaintiffs began construction on or around June 2022 to convert the Hudson to a\n\nmultifamily residential property originally anticipated to include approximately 440 market-rate\n\nrental units together with commercial and amenity space and a penthouse.\n\n 47. The Purported Ground Lease required substantial completion of the construction\n\nproject by May 4, 2024.\n\n 35. Attached to the Ground Lease as Exhibit C, Schedule I, was an initial budget (the\n\n\u201cProject Budget\u201d) for the Project. That Project Budget showed the following uses and sources of\n\nfunds for completion of the Project:\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 21\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 26 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 36. The Project Budget demonstrates that MSP/GLR contributed $178 million to the\n\ntotal capital stack for the Project and calculates that contribution as 43.1% of the stack. If the\n\nDefendant truly owned the Property in fee simple as it claims, the contribution from MSP/GLR to\n\nacquire the Property would not be shown as part of the capital stack for the Project; it would simply\n\nbe equity in the Property. The Project Budget also shows that Parkview Financial contributed $207\n\nmillion, or 50.2%, of the capital stack, and that CSC Hudson pledged $27 million in \u201cDeveloper\n\nEquity\u201d, or 6.6% of the capital stack. Again, if the Defendant truly owned the Property in fee\n\nsimple, CSC, as the Developer, would have no equity to contribute.\n\n 37. Of the $207.5 million \u201cPurchase Price\u201d referenced in the Project Budget, $206.85\n\nmillion was for the purchase of Units 1701 and 1702, and the leasing of Unit 1706. That Purchase\n\nPrice was funded with a $170 million payment from MSP to Cain and a $36.85 million payment\n\nfrom the Debtors to Cain. CSC Hudson\u2019s \u201cDeveloper Equity\u201d pledge was in addition to the $36.85\n\nmillion that the Debtors contributed to the Acquisition Transaction purchase price.\n\n 38. The $47.25 million \u201cUnion Severance, Pension and Healthcare\u201d use referenced in\n\nthe Project Budget is an obligation that the Hudson Hotel owed to the hotel employee labor union\n\n(the \u201cUnion\u201d) that had represented the former Hudson Hotel\u2019s workers. The Debtors\u2019 payment of\n\nthis obligation was necessary in order to convert the Building from a hotel to a multi-family\n\napartment complex. Those monies were paid to the Union pursuant to a settlement agreement.\n\n 39. The \u201c10th Floor Buyout\u201d referenced the exercise of the option to purchase Unit\n\n1706, which occurred in January 2023. That buyout was budgeted at $13 million, but the actual\n\nprice was $10 million and paid for with $8 million from MSP to Cain and a $2 million contribution\n\nfrom the Debtors to Cain, completing the Acquisition Transaction.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 22\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 27 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 40. The hard and soft costs listed in the Project Budget were related to the construction\n\nof the Project\u2019s 444 apartment units.\n\nC. Initial Construction Efforts\n\n 41. Between May 2022 and late 2023, approximately $24 million of the hard costs\n\nlisted in the Project Budget were spent by the Debtors on the Project. As a result, approximately\n\n90 percent of the necessary demolition of the former hotel is complete. Among other things, that\n\ndemolition removed the ground floor escalators which had originally provided hotel guests egress\n\nto the ground floor from reception, check-in and hotel amenity areas on the second floor. Escalator\n\nremoval created ground floor egress for the occupancy of the Project\u2019s one commercial tenant, LA\n\nFitness (\u201cLAF\u201d), and the build-out of LAF\u2019s space effectively eliminated practical redesign of\n\negress for a hotel use.\n\n 42. In addition, between May 2022 and late 2023, approximately 40 percent of the\n\nroom-to-apartment conversion work was completed.\n\n 48.43. When Plaintiffsthe Debtors commenced development and then construction, the\n\nHudson Hotel Building contained 39 single room occupancy (\u201cSRO\u201d) units and now contains 32\n\nSRO units, many of which continue to beapartments occupied by long-term tenants (the \u201cSRO\n\nTenants, who\u201d). These SRO Tenants are beneficiaries of rent-stabilization under New York City\n\nlawrent-stabilization laws. Because the Hudson Hotel Building is also located within the Clinton\n\nSpecial District, of New York City, zoning regulations require that the New York City Department\n\nof Housing and Preservation DevelopmentHealth and Human Services (\u201cHPD\u201d) issue a Certificate\n\nof No Harassment (\u201cCONH\u201d) following an investigation and survey of tenants residing at the\n\nHudson. Plaintiffs therefore required a CONH from the Department of Buildings before making\n\nalterations to the Hudsonthat Building. The CONH certifies that a building owner is not harassing\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 23\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 28 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ntenants by, among other things, offering money, threatening the use of force, disrupting essential\n\nservices such as heat and water, or negligently creating an unsafe living environment.\n\n 49. The Purported Ground Lease required Plaintiffs to obtain the CONH by\n\nJuly 8, 2024 (the \u201cCONH Requirement Outside Date\u201d). See Ex. A, at 5.\n\n 50. On December 2, 2022, HPD sent a letter to the SRO Tenants seeking information\n\nin connection with Hudson\u2019s CONH application. On September 7, 2023, the SRO Tenants\n\npresented to Manhattan Community Board Four alleged incidents of harassment including:\n\n(i) inadequate notice of water and electricity shutdowns, (ii) inadequate pest control, (iii) positive\n\ntesting for lead, and (iv) exposed wiring and cables.\n\n 51. The HPD made an initial determination finding that there was reasonable cause to\n\nbelieve that harassment occurred and on September 25, 2023, issued a notice of hearing and\n\npetition for Debtors to be heard before the Office of Administrative Trials and Hearings\n\n(\u201cOATH\u201d). The HPD also recommended that OATH deny the Plaintiffs\u2019 application for a CONH.\n\n 52. When the HPD issued the initial determination, Plaintiffs were still controlled by\n\nthe Smekes and, rather than contesting the HPD\u2019s determination of harassment, the Smekes caused\n\nPlaintiffs to opt to pursue an application for a cure agreement with HPD to clear the record and\n\nallow redevelopment and construction to continue. To qualify for a cure agreement, an applicant\n\nmust provide permanent affordable housing amounting to 28% of the total residential floor area of\n\nthe building overseen by the HPD Inclusionary Housing Unit. Accordingly, the decision to seek\n\na cure agreement affected the earning potential of the Plaintiffs\u2014if a cure agreement is obtained,\n\nthe Plaintiffs may only obtain market rate rentals for approximately 300 of the approximately 440\n\nunits anticipated in the Hudson following redevelopment.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 24\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 29 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 53. It quickly became clear that Plaintiffs were not going to meet the CONH\n\nRequirement Outside Date. In the event that Plaintiffs did not meet the CONH Requirement\n\nOutside Date, the Purported Ground Lease provided for delivery to Defendant of an alternative\n\n\u201cFallback Business Plan\u201d for a \u201cFallback Project,\u201d subject to Defendant\u2019s approval. See Ex. A, \u00a7\n\n48(c).\n\n 54. Plaintiffs originally delivered two alternative Fallback Business Plans to Defendant\n\non December 22, 2023 and January 11, 2024.\n\n 55. In response, Defendant conditioned their preliminary acceptance of either Fallback\n\nBusiness Plan on Plaintiffs entering into an \u201cinterim amendment\u201d to the Purported Ground Lease.\n\nThe purpose of this interim amendment was simple: raise the rent to make sure Defendant has its\n\nloan repaid in a timely manner, notwithstanding that the economics of the development materially\n\nchanged to the detriment of Plaintiffs. Indeed, in Defendant\u2019s response to the submitted Fallback\n\nBusiness Plan, it refers to the \u201cexceptionally low cost of capital provided to\u201d Plaintiffs and explains\n\nthat Defendant\u2019s \u201cinvestors are no longer willing to watch the value of their investment plummet\n\nwithout a corresponding adjustment of economics\u201d to the Purported Ground Lease.\n\n 44. In late 2023, the Project was the subject of two stop work orders (the \u201cStop Work\n\nOrders\u201d), one of which was related to a failure to obtain a CONH based on complaints made by a\n\nnumber of SRO Tenants. Those Stop Work Orders remain in place, and no significant construction\n\nwork towards completing the Project has been undertaken since the Stop Work Orders were issued.\n\nInstead, since issuance of the Stop Work Orders, basic systems have been maintained, tenant- and\n\nsafety-related work has been completed, and construction has continued on the space that LAF\n\nintends to lease.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 25\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 30 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 45. To date, the Debtors have spent approximately $216 million toward the completion\n\nof the Project. These expenditures include the original $36.85 million acquisition cost, the $2\n\nmillion 10th floor acquisition cost, the Union settlement, LAF construction costs, property taxes,\n\ndemolition costs, development planning, subcontractor settlements, insurance, utilities and\n\nproperty maintenance. The Debtors estimate that the Project will be complete and substantially\n\nrented by 2029. The Debtors also estimate that the annual net operating income (\u201cNOI\u201d) of the\n\ncompleted Project, before the payment of rent under the Ground Lease, will be between $13 and\n\n$17 million.\n\nD. The Fourth Amendment\n\n 46. In an effort to convince HPD to lift the Stop Work Orders, the Debtors\u2019 prior owners,\n\nthe Smekes, agreed to alter the business plan for the Project by making 138 of the Project\u2019s 444\n\napartment units HPD-approved, below-market rental units. The Stop Work Orders, and this\n\nproposed alteration to the Project, led to the Debtors\u2019 defaults under both the Ground Lease and\n\nParkview Financial Agreements. It also required the Debtors to submit \u201cFallback Business Plans\u201d\n\nto MSP under the terms of the Ground Lease.\n\n 56.47. Plaintiffs agreed to enter intoMSP, in light of the defaults, demanded that CSC\n\nHudson and the Debtors agree to modified terms in the Ground Lease in order to avoid an\n\nimmediate forfeiture of the Condominium Units to MSP. These changes were ultimately\n\nmemorialized in March 2024 in a fourth amendment to the Purported Ground Lease on March 29,\n\n2024 (the \u201cFourth Amendment\u201d). A true and correct, a copy of the Fourth Amendmentwhich is\n\nattached hereto as Exhibit E Pursuant toC). Alberto Smeke testified that CSC Hudson viewed\n\nsigning the Fourth Amendment, the going-forward annual Base Rent was increased to\n\n$8,750,000\u2014an increase of approximately 36%\u2014payable in $729,166.67 monthly installments.\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 26\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 31 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nThe as its only option if it wanted to continue with the Project and not lose the Property \u2014 i.e., it\n\nunderstood that MSP would not approve any Fallback Business Plan if the Debtors did not sign\n\nthe Fourth Amendment allowed for a credit of $2,350,000 to be applied to the monthly rent\n\npayments in twelve monthly installments ending on March 29, 2025. See Ex. E, \u00a7 5(b). As of the\n\nPetition Date, the contractual purported monthly rental obligation was still $729,166.67, assuming\n\nsection 365 of the Bankruptcy Code applies..\n\n 48. Alberto Smeke also testified that after the Debtors executed the Fourth Amendment,\n\nthe value of the Project substantially decreased due to the Fourth Amendment\u2019s significant rent\n\nincrease from $6.4 million to $8.75 million a year. Although a \u201crent buyback\u201d provision was\n\nincluded in the Fourth Amendment, the Debtors determined that buyback option was not\n\neconomically rational for them\u2014the Debtors would have been required to pay down the rent at a\n\n4.5% capitalization rate (i.e., at a high price per dollar of rent reduction), but the market would\n\nvalue the rent reduction at a lower price per dollar of rent reduction. The Debtors would therefore\n\nbe overpaying for the rental rate reduction.\n\n 49. In addition, the cost of \u201cbuying back\u201d the annual rent rate to the original $6.4\n\nmillion was approximately $52 million \u2013 an amount the insolvent Debtors did not have and could\n\nnot feasibly obtain in the finance markets.\n\n 50. Finally, the Fourth Amendment contained the $65 million penalty discussed above,\n\na sum that was apparently designed to create a liquidity crisis and force a default and forfeiture of\n\nthe Property once the altered Project was complete. MSP\u2019s own expert has stated that such a\n\nforfeiture would result in MSP receiving a completed Project worth over $300 million.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 27\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 32 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nE. The Debtors Were Insolvent At All Relevant Times\n\n 51. The Debtors\u2019 insolvency is demonstrated by a balance sheet test, which\n\ndemonstrates that at critical points\u2014including at the execution of the Fourth Amendment and the\n\nPetition Date\u2014the Debtors\u2019 debts exceeded their assets.\n\n 52. On March 29, 2024, the day the Fourth Amendment was executed, the Debtors had\n\napproximately $225 million in assets and $372 million in debts, for a negative equity value of over\n\n$145 million. And, on the Petition Date, the Debtors had approximately $220 million in assets\n\nand $458 million in debts, for a negative equity value of approximately $238 million.\n\n 53. Moreover, at all relevant times, the Debtors\u2019 only asset\u2014the Project\u2014was not\n\ngenerating income other than the nominal amounts received from the SRO Tenants. These\n\namounts were inadequate and unreasonably small capital to meet the Debtors\u2019 anticipated\n\nobligations under the Ground Lease and the Fourth Amendment. The Debtors were thus also\n\ninsolvent on these dates under alternative solvency tests, including the cash flow test and capital\n\nadequacy test.\n\n FACTS SUPPORTING RECHARACTERIZATION\n\n 54. The Ground Lease is what MSP\u2019s expert calls a \u201cmodern institutional ground\n\nlease.\u201d As such, it is not a true lease; instead, it is a finance product marketed to real estate\n\ndevelopers and sponsors as a way to lower the initial capital demands of real estate construction\n\nprojects. Notably, what is not marketed are the significant risks that this finance product brings to\n\nany construction venture, particularly ones that experience any delays or difficulties.\n\n 55. The Ground Lease includes a number of provisions identified by courts as\n\nindicative of a lease that should be recharacterized. In addition, the Acquisition Transaction and\n\nthe Ground Lease include unique elements that do not exist in the published case law and that\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 28\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 33 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nfurther demonstrate the Ground Lease is not a true lease, including, as described in more detail\n\nbelow: (a) direct purchase price contributions by the Debtors for the acquisition of the Property,\n\nand (b) the requirement of extraordinary payments \u2013 what MSP calls \u201cloans\u201d \u2013 by the Debtors to\n\nMSP. Once again, a primary problem here is the uniquely draconian feature of one of these\n\nextraordinary payments/loans, the $65 million Right-Size Payment. With that Payment\n\nrequirement, the Ground Lease is designed to manufacture a liquidity crisis that will result in the\n\nDebtors turning over to MSP the entirety of the Debtors\u2019 assets, i.e., a Project currently worth over\n\n$200 million. This turnover would occur many decades before the Ground Lease\u2019s term ends,\n\neven though rent has been regularly paid in accordance with the terms of the Ground Lease and\n\napplicable bankruptcy law, and MSP has not contributed any of the $216 million invested in the\n\ndevelopment and construction of the Project. The Debtors, on behalf of their estates and all\n\ncreditors, seek to prevent this forfeiture.\n\n A. The Debtors Paid Almost $39 Million Directly To The Seller For The\n Purchase Of The Condominium Units\n\n 56. Unlike any other recharacterization case known to the Debtors, the Acquisition\n\nTransaction and the underlying Project Agreements required the Debtors to pay $38.85 million\n\ndirectly to the seller (Cain) for the purchase of the underlying fee simple (the Condominium Units)\n\nthat was then leased to the Debtors. Specifically, the Acquisition Transaction required the Debtors\n\nto pay Cain $36.85 million for the purchase of Units 1701 and 1702 and $2 million for the purchase\n\nof Unit 1706. This fact is a significant indicator that the Acquisition Transaction is more like a\n\nloan financing than a lease: in true leases, lessees do not make direct payments to the seller of the\n\nvery property being acquired and contemporaneously leased to the lessee.\n\n 57. Although the Ground Lease suggests that these monies, at least in part, went toward\n\nthe acquisition of \u201cPersonal Property\u201d, the facts demonstrate otherwise. Alberto Smeke confirmed\n[Link-to-previous setting changed from off in original to on in modified.].\n 29\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 34 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nthat there was nowhere near $36.85 million worth of personal property at the Property (an\n\nabandoned hotel) at the time of the Property Acquisition. Further, MSP admitted that Cain\n\nconveyed whatever personal property at the Property to the Debtors pursuant to a \u201cBill of Sale\u201d\n\n(see Exhibit D hereto). That Bill of Sale reveals that Cain sold all personal property to the Debtors\n\nfor the de minimis sum of ten ($10) dollars. The Debtors\u2019 $38.85 million in payments to Cain\n\nwere for the purpose of purchasing real estate (the Condominium Units), not personal property.\n\n B. The Ground Lease Expressly Recognizes That MSP Was Providing\n Financing To The Capital Stack For The Debtors\u2019 Acquisition Of The\n Property And Development of the Project\n\n 58. As noted above, the Project Budget accompanying the Ground Lease specifically\n\nstates that MSP contributed $178 million to the total capital stack for the Project and calculates\n\nthat contribution as 43.1% of the stack. That amount was in addition to the $207 million (50.2%)\n\ncontributed by Parkview Financial and the $27 million (6.6%) pledged by CSC Hudson in the form\n\nof \u201cDeveloper Equity.\u201d\n\n C. The Property Was Purchased Solely In Connection With The\n Debtors\u2019 Conversion Project\n\n 59. In PCH I, the Second Circuit stated that \u201cthe fact that property is \u2018purchased by the\n\nlessor specifically for the lessee\u2019s use\u2019 tends to prove that no true lease exists.\u201d 804 F.2d at 200-\n\n201 (citation omitted). Here, MSP purchased/leased the Condominium Units contemporaneous\n\nwith the Debtors and MSP executing the Ground Lease. In fact, the Closing Agreement between\n\nMSP and the Debtors specifically required execution of the Ground Lease (Closing Agreement,\n\n\u00a7 3), and MSP\u2019s investment guidelines do as well. There is no evidence that, prior to the\n\nAcquisition Transaction, MSP ever considered purchasing and leasing, or even had the opportunity\n\nto purchase and lease, the Condominium Units to anyone other than the Debtors, or that MSP itself\n\never contemplated owning and implementing the Project itself. Indeed, as mentioned above, MSP\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 30\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 35 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nwas introduced to the Debtors two days after the Debtors had entered into the Purchase Agreement\n\nwith Cain to purchase the Property.\n\n 60. Further, the Debtors always understood that they\u2014not MSP or any other sponsor\u2014\n\nwould be developing the Project.\n\n D. The Ground Lease\u2019s \u201cRents\u201d Are Based On Targeted Investor Yields\n And Not Market Rental Rates\n\n 61. PCH I also considered whether supposed \u201crents\u201d under a ground lease are based on\n\nmarket rental rates or calculated to ensure a return to investors. 804 F.2d at 200 (recharacterization\n\naffirmed where \u201crent was not calculated to compensate Liona for the use of the property; rather\n\nthe parties structured the \u2018rent\u2019 solely to ensure Liona\u2019s return on its investment\u201d). MSP\u2019s Nipon\n\nconceded that the rents MSP required from the Debtors were linked to a particular return for its\n\ninvestors\u2014what MSP called the \u201cyield\u201d (calculated as the ground rent divided by MSP\u2019s\n\ncontributions toward the purchase of the Condominium Units). In the original Ground Lease,\n\nMSP\u2019s target yield was 3.5 percent, and by the time of the March 2024 execution of the Fourth\n\nAmendment\u2014because of rising interest rates generally\u2014it was 4.5 percent.\n\n 62. In his podcast interview, MSP\u2019s Nipon confirmed that MSP prices its ground lease\n\n\u201crent\u201d exactly as a lender prices debt\u2014as a spread to a benchmark interest rate\u2014rather than by\n\nreference to fair market rental values. Nipon stated: \u201cwe price everything as a spread to the 30-\n\nyear treasury, that appears to be the appropriate benchmark for a 99-year duration. . . . [B]est cost\n\nto capital, which would be existing cash flowing multifamily is probably the 30-year plus 65 basis\n\npoints today.\u201d Nipon also confirmed that MSP sizes its \u201crent\u201d using coverage ratios\u2014a tool used\n\nby lenders to ensure cash flow adequately services debt\u2014stating that MSP typically wants \u201cground\n\nrent to be between 25 and 30% of NOI. In other words, somewhere between three and a half and\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 31\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 36 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nfour turns of coverage.\u201d Coverage ratios are a hallmark of lending; they have no place in a true\n\nground lease.\n\n E. The Ground Lease Required An Extraordinary Non-Rent Payment\n With 94 Years Left On Its Term\n\n 63. MSP\u2019s Nipon has also conceded that ground lessors have two principal financial\n\ninterests: collecting rent and the ultimate reversion of the leased property in 99 years. However,\n\nhe also insisted that MSP had a \u201cvested interest\u201d in the near-term progress of the Project. When\n\npushed to explain how such a vested interest could possibly exist (since MSP had no ownership\n\ninterest in the leasehold), he pointed to the risk of default under the Ground Lease.\n\n 64. Nipon was likely referring to a decidedly non-lease component of the Ground\n\nLease. This component, which was inserted by MSP pursuant to a \u201cdelicate conversation\u201d late in\n\nthe process of negotiating the Ground Lease, is set forth in Section 60 of the Ground Lease, entitled\n\n\u201cRight-Size Payment\u201d:\n\n At any time . . . Tenant elects to pursue a Fallback Project and submits a\n Fallback Business Plan to Landlord, the receipt (or deemed receipt) of such\n . . . Fallback Business Plan, as applicable, shall entitle Landlord to the\n Right-Size Payment in accordance with this Section 60, which Right-Size\n Payment shall be due and payable upon the date (the \u201cRight-Size Event\n Date\u201d) that is the earlier to occur of . . . (y) the date that is eighteen (18)\n months following Completion of the Fallback Project, and (z) the last day\n of the fifth (5th) Lease Year (such earliest occurrence, the \u201cRight-Size\n Event\u201d).\n\n 65. As such, the original Ground Lease incorporated terms that would likely create a\n\ncommercially infeasible and thus incurable default should the Project not proceed according to the\n\noriginal business plan. A lessor is typically concerned about receiving rent and, when such rent is\n\nnot received, evicting the tenant. But the Ground Lease incorporates provisions that require\n\nextraordinary non-rent payments if the Project is compelled to change and does not meet short-\n\nterm projections \u2013 even if, as here, rent is being timely paid.\n[Link-to-previous setting changed from off in original to on in modified.].\n 32\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 37 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 66. Just five years after commencement of the Ground Lease (i.e., after approximately\n\n1/20 of the Ground Lease term), the Ground Lease required a $56 million payment if the Project\u2019s\n\nbusiness plan had changed and was still not generating any NOI. Once again, such payment was\n\ndue even if rent was being paid. Further, even if the current estimates at $13-17 million for the\n\nProject\u2019s annual NOI were to have materialized by 2027, the Debtors would still have owed MSP\n\nan extraordinary payment of over $50 million. Such a provision is not found in a true lease. Indeed,\n\nto the best of the Debtors' knowledge, no reported recharacterization decision has involved a\n\ntrigger provision this overtly \u201cloan-like\u201d\u2014underscoring just how far the Ground Lease departs\n\nfrom any bona fide lease arrangement.\n\n F. The Fourth Amendment Requires An Even Larger Non-Rent\n Payment With 89 Years Left On The Ground Lease\u2019s Term\n\n 67. MSP claims that it did the Debtors a favor by pushing out the Right-Size Payment\n\nto the tenth year (from the fifth year) in the Fourth Amendment. However, no benefit was received,\n\nand the likelihood of a debilitating payment only increased. Whereas MSP calculated the Right-\n\nSize Payment due at five years at $28 million if NOI was $18 million, in the Fourth Amendment,\n\nthe right-size payment at ten years is $65 million even if NOI could somehow reach $21 million.\n\n(Fourth Amend. \u00a7 6 and Ex. C).\n\n 68. Specifically, Section 6 of the Fourth Amendment amended the Ground Lease to\n\nstate the following:\n\n Landlord is hereby entitled to the Right-Size Payment in accordance with\n this Section 60 [of the Ground Lease], which Right-Size Payment shall be\n due and payable upon the last day of the tenth (10th) Lease Year (such date,\n the \u201cRight-Size Event Date\u201d; and such event, the \u201cRight-Size Event\u201d).\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 33\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 38 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nExhibit C to the Fourth Amendment then provides sample Right-Size Payment calculations for\n\n2032. Once again, at an annual NOI of $21 million, the Debtors will owe the maximum: $65\n\nmillion.\n\n 69. MSP knew and knows that NOI of $21 million or more is unrealistic for the current\n\nProject. But because, in 2024 \u2013 two years into a 99-year lease \u2013 it had the ability under the terms\n\nof the lease to take the Project away from the insolvent Debtors, it demanded this unpayable $65\n\nmillion penalty, forcing the Debtors to enter into the completely unreasonable and extortionary\n\nFourth Amendment.\n\n 70. True leases do not demand $65 million payments when difficulties arise and values\n\nof the leased property decline. Loans, not leases, contain these types of coverage-ratio provisions.\n\n G. The Extraordinary Payments Cannot Be, And Are Not, Treated As\n Rent In The Ground Lease Or Fourth Amendment\n\n 71. Referring to the extraordinary payments demanded by MSP as \u201cnon-rent\u201d is not\n\nhyperbole: the Ground Lease itself recognized that they are not rent and thus treats them as \u201cloans\u201d\n\nfrom the Debtors to MSP.\n\n 72. Four times in the Ground Lease and its amendments, extraordinary payments\n\noutside of the annual rent are referred to as \u201cprepaid\u201d or \u201cadditional\u201d rent, but MSP ultimately\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 34\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 39 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ntreats these as loans because the IRC precludes rent treatment. These four extraordinary payments\n\nare:\n\n (1) the Debtors\u2019 $36.85 million contribution to the purchase of Units 1701\n and 1702 (Ground Lease, \u00a7 5(d));\n\n (2) the Debtors\u2019 $2 million contribution to the purchase of Unit 1706\n (Ground Lease, \u00a7 47(e));\n\n (3) any Right-Size Payment (Ground Lease, \u00a7 60(d)); and\n\n (4) any buy back of rent under the Fourth Amendment (Fourth Amendment,\n \u00a77(e)).\n\n 73. As MSP concedes in the terms of the Ground Lease, IRC \u00a7 467 forbids the treatment\n\nof these payments as rent. Therefore, for all four of these extraordinary payments, the Ground\n\nLease contains language identical or similar to the following: \u201c[f]or all U.S. federal, state and\n\nlocal tax purposes, Landlord and Tenant shall treat the Prepaid Rent as a prepayment of Additional\n\nRent that is treated as a loan pursuant to Section 467 of the Code.\u201d (See Ground Lease, \u00a7\u00a7 5(d),\n\n47(e), 60(d) and Fourth Amendment, \u00a7 7(e).) These supposed loans are from the tenant, the\n\nDebtors, to or on behalf of the landlord, MSP.\n\n 74. Two of the extraordinary payments have already been paid: the Debtors\u2019\n\ncontribution to the purchase of Units 1701 and 1702 and the Debtors\u2019 contribution to the purchase\n\nof Unit 1706. MSP concedes that it has made no provisions for the repayment of these \u201cloans\u201d to\n\nthe Debtors or crediting of these payments against rent.\n\n 75. Lessors under true leases collect true rent that can, under all applicable laws, be\n\ntreated as rent. The Ground Lease enables the Defendant to collect from the Debtors (or, in the\n\ncase of the purchase price payments, cause the Debtors to pay to third party Cain) extraordinary\n\npayments that are not rent. Accordingly, it is not a true lease.\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 35\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 40 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n H. The Ground Lease Is Not A Ground Lease: Neither MSP Nor The\n Debtors Ever Owned The Land Under The Condominium Units\n\n 76. The Ground Lease does not lease an interest in any \u201cground\u201d whatsoever. The land\n\nupon which the Building is located is owned by the Condominium Association as a Common\n\nElement and not by any owner of a condominium unit within the Condominium. As such, the\n\nGround Lease, on its face, is disingenuously titled.\n\n I. So-Called Modern Institutional Ground Leases, Like The\n Ground Lease Here, Are Admitted In The Industry To Be At Risk Of\n Recharacterization\n\n 75. MSP\u2019s leasing expert calls the Ground Lease a \u201cmodern institutional ground lease\u201d\n\nand compares it to other similar financial products in the marketplace, including ground leases\n\nmarketed by Safehold Inc. (\u201cSafehold\u201d), a publicly traded real estate investment company.\n\nTellingly, Safehold has expressly warned its investors:\n\n We are subject to the risk of bankruptcy of our Tenants. . . .\n\n It is also possible that a bankruptcy court could re-characterize our Ground\n Leases as secured lending transactions depending on its interpretation of the\n terms of the lease. If a lease were judicially recharacterized as a secured\n lending transaction, we would not be treated as the owner of the property\n subject to the lease and could lose the legal as well as economic attributes\n of the owners of the property, which could have a material adverse effect\n on us.5\n\n 76. Nipon, in his podcast interview, credited \u201cfolks at ISTAR and Safehold for kind of\n\ntrailblazing\u201d the space of \u201cinstitutional or modern ground lease[s],\u201d thereby confirming that MSP\u2019s\n\n\n\n\n5\n Safehold Inc., Form 10-K for the Fiscal Year Ended December 31, 2024, p. 16 (emphasis in\noriginal).\n[Link-to-previous setting changed from off in original to on in modified.].\n 36\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 41 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nground lease product belongs to the very category of products that Safehold has warned its\n\ninvestors may be recharacterized as lending transactions.\n\n J. Other Considerations\n\n 77. Other considerations support recharacterization of the Ground Lease. As noted,\n\nthe term of the Lease is 99 years (Ground Lease, \u00a7 3), if the likely triggering of a default in year 5\n\n(originally) or year 10 (under the Fourth Amendment) is ignored. In PCH I and MOAC Mall\n\nHoldings LLC v. Transform Holdco LLC (In re Sears Holdings Corp.), 2024 WL 5113165 (2d Cir.\n\nDec. 16, 2024) (\u201cMOAC\u201d), the Second Circuit looked to the unusually long term of the leases at\n\nissue\u201433 years with the option to extend to 165 years in PCH I and 100 years in MOAC \u2014as a\n\nfeature weighing in favor of recharacterization.\n\n 78. In addition, \u201c[t]he fact that the lessee assumes and discharges substantially all the\n\nrisks and obligations ordinarily attributed to the outright ownership of the property is more\n\nindicative of a financing transaction than of a true lease.\u201d PCH I, 804 F.2d at 201. The Ground\n\nLease is \u201ctriple net,\u201d meaning that it obligates the Debtors or their affiliates to: (a) pay all real\n\nestate taxes (Ground Lease, \u00a7 7(a)), (b) obtain insurance at levels demanded by the Defendant and\n\nnaming the Defendant as an additional insured (id. \u00a7 15) and (c) keep and maintain the Hudson in\n\ngood condition, repair, and appearance (id. \u00a7 9(a)). The Ground Lease also obligates the Debtors\n\nto obtain all permits and licenses (id. \u00a7 7(c)), keep the Property free and clear of liens (id. \u00a7 10),\n\npay all utilities (id. \u00a7 9(f)), and assume the risk of loss and indemnify the Defendant (id. \u00a7 38).\n\nMSP, by contrast, has no financial obligations typically associated with ownership under any of\n\nthe operative agreements, for a period of 99 years.\n\n 79. The Court has identified certain Ground Lease provisions that it states weigh\n\nagainst recharacterization. The Debtors respectfully suggest that these provisions do not militate\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 37\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 42 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nin favor of a true lease and, in any event, are decidedly outweighed by the numerous aspects of the\n\nAcquisition Transaction and the unique provisions of the Ground Lease discussed above that\n\nsupport recharacterization.\n\n 80. First, the Court has noted that the Ground Lease has no provision for the Debtors\n\nto obtain title to the Condominium Units, even at the end of the Lease. In MOAC, a case involving\n\nan anchor store in a mall (and thus no apparent lessee right to purchase real estate at any point in\n\ntime), the Second Circuit noted that a paramount consideration was precluding a windfall to the\n\nputative lessor. In MOAC, the lessee had pre-paid the first 30 years of rent. Notwithstanding the\n\nreversionary interest held by the putative lessor, the Second Circuit found that the lessor had\n\nreceived the benefit of its bargain with the lessee and refused to find that the putative lease was\n\ngoverned by section 365 of the Bankruptcy Code, which would have resulted in a windfall to the\n\nlessor. In MOAC, the prepaid rent was just $300. Here, the Debtors have \u201cprepaid\u201d tens of millions\n\nof dollars (plus contributed hundreds of millions of dollars in development-related costs). Indeed,\n\nthe Second Circuit faced a similar situation in Int\u2019l Trade Admin. v. Rensselaer Polytechnic Inst.\n\n(\u201cRPI\u201d), 936 F.2d 744 (2d Cir. 1991)\n\n:\n\n To permit [RPI] to recapture the leased premises with the manufacturing\n facility improvements would amount to a \"windfall\" to RPI. RPI might\n argue that there is no \"windfall\" since the property, including the\n manufacturing facility, reverts to it in 2082 at the end of the 99 year term.\n However, the windfall is the current value today of the premises improved\n by a relatively new manufacturing facility, less the \"present value\" in\n economic terms of a reverter of the premises in an unknown state of\n improvement in 91 years. That a present reversion to RPI would be grossly\n inequitable bolsters our conclusion that \u00a7 365(d)(4) does not apply to this\n unusual transaction.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 38\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 43 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n936 F.2d at 751. See also In re Berez, 646 F.2d 420, 421 (9th Cir. 1981)\n\n(\u201cThe absence of a purchase option in a lease does not preclude a finding that the lease was\n\nactually a disguised secured loan\u201d).\n\n 81. Second, the Court has also stated that under Section 11 of the Ground Lease, MSP\n\ncould sell \u201cits fee title in the leased property, subject to the lease.\u201d However, Section 11 uses the\n\nterm \u201cLand,\u201d which is defined in the Ground Lease as consisting of elements of the Hudson Hotel\n\nBuilding other than the Condominium Units and comprising Common Elements. As noted above,\n\nthe Common Elements are owned by the Condominium Association, not owners of Condominium\n\nUnits. Therefore, the foregoing provision appears to be a nullity, as MSP has no ability to sell the\n\n\u201cLand.\u201d Moreover, even if it is assumed that Section 11 allows MSP to sell the actual\n\nCondominium Units, subject to the Ground Lease, a change in ownership does not change the\n\nGround Lease. The fact that the Ground Lease was not a true lease with MSP as lessor does not\n\nchange with a successor lessor: it is still not a true lease.\n\n 82. Third, the Court also noted that under Section 8(a) of the Ground Lease, the\n\nDebtors\u2019 use of the Property is subject to MSP\u2019s approval. That term, however, is common in any\n\nfinancing of a real estate construction project through affirmative and negative loan covenants. In\n\nfact, Section 8(a) reinforces that MSP was simply adding to the capital stack of the Project; the\n\nParkview Financial Agreements contain similar provisions.\n\n FACTS SUPPORTING FRAUDULENT TRANSFER\n\n 83. As noted above, the Debtors were insolvent at all times relevant to this proceeding,\n\nincluding at the time the Fourth Amendment was signed. And, the Fourth Amendment caused the\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 39\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 44 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ntransfer of significant property from the Debtors to MSP for no reasonably equivalent value,\n\nrendering it even more insolvent.\n\n 84. First, the Fourth Amendment, with no justification whatsoever, raised the annual\n\nrent under the Ground Lease from $6.4 million to $8.75 million. (Fourth Amendment, \u00a7 3) The\n\nGround Lease contains no provision for such an increase in rent, and MSP demanded it simply\n\nbecause it had significant bargaining leverage over the insolvent Debtors and interest rates had\n\nrisen between 2022 and 2024.\n\n 85. Second, the Fourth Amendment, with no justification whatsoever, rewrote the\n\nRight-Size Payment to ensure that in 2032 an extraordinary payment of $65 million will be due\n\nfrom the Debtors to MSP. (Id. \u00a7 6)\n\n 57.86. TheThird, the Fourth Amendment also allowed foradded, with no justification\n\nwhatsoever, more frequent adjustments to the Base Rent to account for inflation, from$8.75\n\nmillion rent, changing the frequency of the Ground Lease rent adjustments from every 10 years to\n\nadjustments every 5 years. See id.,Id. \u00a7 5(d). It also ensures that the increase is no less than 2%\n\nregardless of inflation. See id.\n\n 87. The Debtors received nothing of value for any of these transfers, much less\n\nreasonably equivalent value. MSP claims that the Fourth Amendment\u2019s buy-back provision is\n\nsomehow a benefit. However, under Section 7 of the Fourth Amendment, in order to buy down\n\nthe Ground Lease rent from $8.75 million to the original $6.4 million, the Debtors would be\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 40\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 45 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nrequired to pay MSP $52 million. Nothing in the Fourth Amendment provides the Debtors with\n\nanything even close to $52 million in value.\n\n DEBTORS\u2019 REQUESTED RELIEF\n 58. The Fourth Amendment further changes the inputs for the calculation of the Right-\n\nSize Payment to be more favorable to Defendant, ballooning the potential payment up to a cap of\n\n$65,000,000. See id. at 5.\n\n 59. In exchange for incurring these increased payment obligations to Defendant,\n\nPlaintiffs received (1) a change in the date of the Right-Size Payment, which was pushed back\n\nfrom the end of the fifth lease year to the end of the tenth lease year; and (2) the ability to make a\n\nBuyback Option payment to Defendant to decrease going-forward \u201crent\u201d payments upon\n\ncompletion of construction in accordance with a not-yet-agreed-to Fallback Business Plan, but no\n\nlater than May 4, 2027. See id., \u00a7 7(a). In effect, the Debtors received an option to repay the loan\n\nearly in exchange for the Fourth Amendment, which materially increased the Debtors\u2019 costs under\n\nthe Ground Lease.\n\nD. UCC Foreclosure Sale of Equity Interests\n 88. Consistent with the procedure in PCH I and PCH II, the Debtors submit that the\n\nGround Lease should first be declared not a true lease under, and not subject to the\n\nassumption/rejection requirements of, section 365 of the Bankruptcy Code.\n\n 89. The Debtors further submit that, upon the Court making the foregoing declarations,\n\nthe Court should conduct supplemental hearings pursuant to sections 105, 502, 506 of the\n\nBankruptcy Code and Bankruptcy Rules 3012 and 7001(b) and (i), to determine the nature,\n\npriority, and extent of the Defendant\u2019s claim under the Ground Lease. With respect to the nature\n\nof the claim, the Debtors proffer, without limitation, two possible outcomes to that proceeding\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 41\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 46 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nbased upon how the Court characterizes the Acquisition Transaction and the Ground Lease as a\n\npart of that transaction.\n\n 90. In the first instance, the Debtors request that the Court characterize the Acquisition\n\nTransaction and MSP\u2019s contribution of capital as a loan to finance the Debtors\u2019 acquisition of the\n\nCondominium Units, which would either be unsecured financing or, if the Court determines\n\nappropriate, secured by the imposition of an equitable lien. Under this scenario, the Debtors would\n\nbe characterized as the purchasers of the Condominium Units, having already made a considerable\n\ndown payment, and the monies owed under the Ground Lease would be characterized as the\n\nbalance owing to MSP under its acquisition financing loan.\n\n 91. If MSP\u2019s loan is deemed secured by an equitable lien, the extent and priority of that\n\nlien should be determined by the Court in a supplemental proceeding in accordance with\n\nBankruptcy Rule 7001(b), to allow other creditors who assert a secured position to intervene and\n\nbe heard.\n\n 92. Alternatively, the Debtors request that the Court characterize the Acquisition\n\nTransaction as a joint purchase, with the Debtors and the Defendant owning the Condominium\n\nUnits as tenants in common, and with each entity\u2019s ownership being commensurate with its net\n\ncontributions to the acquisition of the Condominium Units. This characterization would recognize\n\nboth MSP\u2019s and the Debtors\u2019 investment in the transaction to acquire the Condominium Units. It\n\nwould also avoid the Debtors\u2019 forfeiture of their investment capital: $38.65 million.\n\n 60. As security for Plaintiffs\u2019 Loan Obligations to Prepetition Lender in addition to\n\ncollateral granted by Plaintiffs to Prepetition Lender, CSC, as pledgor and the then-sole member\n\nof the Plaintiffs, entered into a pledge and security agreement (the \u201cPledge Agreement\u201d) with\n\nPrepetition Lender. Under the Pledge Agreement, as collateral CSC pledged 100% of the equity\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 42\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 47 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ninterests in the Plaintiffs along with certain other rights and interest, and as specifically defined in\n\nthe Pledge Agreement (the \u201cPledged Collateral\u201d) for the Loan Obligations to Prepetition Lender.\n\nUpon an event of default, the Prepetition Lender had the right to conduct a UCC sale of the Pledged\n\nCollateral.\n\n 61. As noted, the Fourth Amendment increased the payments from $6,400,000 to\n\n$8,750,000 million per annum. These increased payments remained owing during construction\n\nand did not fluctuate with the stop work order in place as a result of the HPD\u2019s determination of\n\nharassment and further aggravated already-present liquidity constraints resulting from continued\n\nrent payments during the delays in construction.\n\n 62. The Loan from the Prepetition Lender matured on November 1, 2024. Plaintiffs\n\nwere unable to make payment by that time, and the Prepetition Lender subsequently agreed to\n\nforebear from exercising any remedies on two occasions through November 22, 2024. Ultimately,\n\non November 23, 2024, the Prepetition Lender sent Plaintiffs a notice of default under the Loan\n\nand forbearance agreements.\n\n 63. On or around November 25, 2024, the Prepetition Lender served upon CSC,\n\nPlaintiffs, and the Smekes a notice of public disposition of collateral, scheduling a UCC\n\nforeclosure sale of the Pledged Collateral scheduled for March 24, 2025 (the \u201cUCC Sale\u201d). On\n\nFebruary 11, 2025, the Prepetition Lender served a second notice of disposition and publicized the\n\nadjusted date of the UCC Sale of April 10, 2025.\n\n 64. Prepetition Lender and the Smekes were involved in negotiations to resolve issues\n\narising from the Smekes\u2019 management of the project in order to allow the redevelopment and\n\nconstruction to continue at the Hudson. Those efforts were at least partially successful, and, on\n\nApril 10, 2025\u2014the date scheduled for the UCC Sale\u2014the Prepetition Lender and the Smekes, as\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 43\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 48 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nguarantors of the Loan, entered into an agreement which among other things, adjourned the UCC\n\nSale.\n\n 65. Following intervening litigation and stalled negotiations, the UCC Sale of the\n\nPledged Collateral was ultimately conducted on July 25, 2025. Prepetition Lender obtained the\n\nequity interests in Plaintiffs in exchange for a credit bid in the amount of $80,000,000 of existing\n\nindebtedness. The Prepetition Lender then assigned the interests it acquired to its wholly owned\n\nsubsidiary, PV Hudson. PV Hudson is currently the sole member of the Plaintiffs.\n\n 66. Plaintiffs, now under PV Hudson\u2019s ownership, attempted to negotiate with\n\nDefendant reasonable stand-still agreements and a modification of the Purported Ground Lease to\n\nreflect changes in the economic realities of the project and the actual fair-market value of\n\nPlaintiffs\u2019 use of the Hudson, but were rejected.\n\n 67. On November 20, 2025, Plaintiffs, as Debtors, sought authority in the Bankruptcy\n\nCase to extend the time to perform any obligations under the Purported Ground Lease for a period\n\nof 60 days from the Petition Date, through and including December 21, 2025 [D.I. 94]. The\n\nBankruptcy Court entered an order granting this relief on December 12, 2025, and the Plaintiffs\n\nagreed to pay any rents that were then-due on December 22, 2025, while reserving \u201call rights with\n\nrespect to any claims either party may assert against the other with respect to the Ground Lease\u201d\n\n[D.I. 160].\n\n E. The Purported Ground Lease \u2013 Disguised Financing Arrangement\n\n 68. The Purported Ground Lease embodies characteristics of a disguised financing\n\nagreement or joint venture agreement and is not a true lease.\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 44\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 49 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 1. Payments Under the Ground Lease Bore No Relation to Use of\n the Hudson, But Rather Were Calculated to Ensure Return on\n Investment.\n\n 69. Although the Purported Ground Lease recites that it is a lease and not a financing\n\narrangement, courts look beyond such labels to the economic realities of the transaction. Here, the\n\neconomic substance is that of a financing. The purported \u201crent\u201d payments were not calculated to\n\ncompensate Defendant for the use of the Hudson or by reference to the market value of the\n\noccupancy rights for the Condominium units (Units 1701, 1702 and 1706). Rather, the \u201crent\u201d\n\npayments were designed and structured to ensure that Defendant would receive specific returns on\n\nits investment as one would expect with interest and fees on a loan.\n\n 70. For one, Plaintiffs paid a $36,850,000 upfront payment upon execution of the\n\nPurported Ground Lease. This payment was designated as for the acquisition of \u201cPersonal\n\nProperty,\u201d for the prepayment of rent, or both. But Plaintiffs received no rent credit, and whatever\n\n\u201cPersonal Property\u201d existing in the Hudson\u2014a former hotel occupied by SRO Tenants\u2014is, upon\n\ninformation and belief, worth considerably less than $36.85 million. The descriptions are not\n\ncredible; rather, Plaintiffs effectively made an 18% down payment or an equity contribution to\n\nDefendant. Indeed, upon information and belief, the Hudson was largely gutted of any personal\n\nproperty (i.e., furniture) prior to Defendant\u2019s acquisition of the Property.\n\n 71. Similarly, the Right-Size Payment was calculated to ensure that Defendant saw a\n\nspecific return on its investment in case of the need to switch to a Fallback Project\u2014a reduction\n\nin potential cash flow, resulting in a reduction in value necessitating the need to \u201cright-size\u201d the\n\nLTV ratio. That is, the requirement that Plaintiffs make a Right-Size Payment was triggered by\n\nthe change in redevelopment plans, and to compensate Defendant\u2019s investors as a consequence of\n\nthese changes\u2014again bearing no relation to the value of the occupancy rights for the Hudson.\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 45\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 50 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 72. The Right-Size Payment increases even when the income Plaintiffs generate from\n\nthe Hudson decreases. The Right-Size Payment is inversely associated with the current market\n\nvalue of the use of the Hudson and capped at the sum of $65 million\u2014approximately 38.2% of the\n\noriginal purchase price paid by Defendant\u2014which, when added to the initial downpayment of\n\n$36.85 million represents 50% of the initial purchase price. The Right Size Payment is nothing\n\nmore than an equity cure provision to \u201cright size\u201d the extent of the LTV ratio.\n\n 73. The \u201crent\u201d payments themselves are equally unmoored from the market value of\n\nthe use of the Hudson, ballooning 10% in the sixth and eleventh years of the Purported Ground\n\nLease and at least 2% thereafter with no adjustment based on the fair market value of the use of\n\nthe Hudson anytime during the 99-year term.13The \u201crent\u201d payments ensure that Defendant receives\n\na fixed return that never gets adjusted for the fair market value. As noted earlier, a conservative\n\nestimate of Defendant\u2019s return on investment over the full term of the Purported Ground Lease\n\nexceeds approximately 63%. Defendant is acting as a lender ensuring a return based on the amount\n\nof capital Defendant extended to Plaintiffs.\n\n 74. The payment increases in the Fourth Amendment drive this point home. Indeed,\n\nDefendant admitted that it required Plaintiffs to execute the Fourth Amendment because Defendant\n\nwas worried about the returns it had promised to its investors in reliance on Plaintiffs\u2019 completion\n\nof the redevelopment project. Defendant explained in response to Plaintiffs\u2019 Fallback Business\n\nPlan submitted in December 2023 that its \u201cinvestors require that ground lease proceeds advanced\n\nand ground rent rates and increases be tied to specific thresholds, yields, and coverage ratios based\n\non the asset\u2019s as-stabilized market value and project net operating income\u201d and that its \u201cinvestors\n\n\n\n\n13\n The Parties demonstrated elsewhere in the Purported Ground Lease that they could calculate the fair market value\nof the purported \u201cLeasehold Estate\u201d for other non-\u201crent\u201d purposes. See, e.g., Ex. A, \u00a7 14.\n[Link-to-previous setting changed from off in original to on in modified.].\n 46\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 51 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nare no longer willing to watch the value of their investment plummet without a corresponding\n\nadjustment of economics to the [Purported] Ground Lease.\u201d\n\n 75. Moreover, as a condition to entering the Purported Ground Lease, Defendant\n\nrequired not only a guaranty of rent payments, but also a guaranty that construction would be\n\ncompleted. The guaranty gives Defendant additional credit support beyond the value of the\n\nHudson and external to the Purported Ground Lease and is consistent with support that a lender\n\nwould receive in a conventional financing.\n\n 76.93. The Purported Ground Lease did not provide for a \u201cpre-term\u201d or \u201cholding-period\u201d\n\nrent period prior to receiving development permits or a \u201cconstruction period\u201d rent that would apply\n\nwhile improvements were in process. Here, the rent payments\u2014in effect, interest\u2014started in full\n\nforce without abatement despite the construction delays. Indeed, Plaintiffs will have to pay more\n\nin connection with the Right-Size Payment on account of construction delays than if the\n\nconstruction of the project was finished and Plaintiff were collecting rent. These provisions\n\ndemonstrate that the payment obligations under the Purported Ground Lease were in no way\n\nrelated to the market value of the use of the Hudson.would then be characterized as a co-ownership\n\nagreement granting the Debtors exclusive use of the Condominium Units for 99 years in return for\n\na defined share of the fee interest. Although the Second Circuit in PCH II rejected\n\nrecharacterization of the subject lease as a \u201cjoint venture,\u201d that case involved considerations far\n\nbeyond a simple tenancy in common. Even if a tenancy in common could be viewed as a joint\n\nventure, in this case, it is just a joint venture in the Condominium Units themselves, and not in the\n\nProject or any income derived from the Project.\n\n 94. This relief is supported by the case law. In PCH II, two sophisticated parties\n\nentered into a transaction to facilitate the acquisition, renovation, and operation of a Philadelphia\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 47\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 52 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nhotel. 949 F.2d at 589-90. The bankruptcy court recharacterized the ground lease as a joint venture.\n\nThe Second Circuit affirmed that the purported ground lease was not a \u201ctrue lease\u201d but disagreed\n\nwith the joint venture characterization because the transaction lacked a true profit-sharing element\n\nand the lessor had no right to control the operations or management of the hotel. Instead, the Court\n\nheld that the transaction was a \u201csophisticated secured financing arrangement,\u201d with the lessor\n\nholding an equitable mortgage. 949 F.2d at 599-600.\n\n 95. The Court reached this conclusion because, as here, \u201c[the debtor] was to get the\n\nmoney it needed to refurbish the Hotel and [the lessor] was to receive a fixed rate of return on the\n\nfunds it advanced\u201d and \u201c[the lessor], to protect its funds, retained title to the land and in the event\n\nof a default had the right to retake not only possession of that land but also the Hotel and\n\nimprovements.\u201d Id. at 600. The Second Circuit concluded that \u201cthe deed to the land underlying\n\nthe Hotel while on its face conveying absolute ownership to [the lessor] was in reality nothing\n\nmore than security for the funds that [the lessor] made available to [the debtor]. In short, [the\n\nlessor] held an equitable mortgage.\u201d Id.\n\n 96. Finally, the Debtors request that the Court also conduct supplemental proceedings\n\npursuant to sections 502 and 506 of the Bankruptcy Code and Bankruptcy Rule 3012 to determine\n\nthe amount of the claim or claims in the Chapter 11 Cases held by the Defendant, GLR, MSP, or\n\nany other affiliate or assignee (subject to disallowance of those claims pending payment to the\n\nDebtors\u2019 estates of any amounts determined to be owing to the estates, pursuant to section 502(d)\n\nof the Bankruptcy Code).\n\n 97. Either of these potential outcomes would recognize MSP\u2019s actual investment in the\n\nProject\u2019s capital stack while preventing MSP from inequitably appropriating $200 million in value\n\nand depriving all other creditors in the Chapter 11 Cases of any recovery whatsoever.\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 48\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 53 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n CAUSES OF ACTION\n 77. In its own marketing materials, Defendant describes their \u201cground lease\u201d scheme\n\nas an \u201cinterest only, 99-year financing product intended to maximize Sponsor returns and address\n\ncapital requirements for core to opportunistic real estate investments.\u201d14Defendant is not in the\n\nbusiness of collecting passive rental income like a typical landlord. In other words, Defendant\n\nearns \u201cinterest\u201d on its investment capital. The Purported Ground Lease is simply an investment\n\nand financing vehicle.\n\n 2. Hudson Was Acquired By Defendant Specifically For Plaintiffs\u2019\n Use.\n\n 78. Defendant received assignment of the Purchase and Sale Agreement from\n\nPlaintiffs, then paid for and acquired Hudson with the sole purpose of turning it around and\n\n\u201cleasing\u201d it to Plaintiffs. The purpose of this scheme is to have Defendant acquire the Condo Units\n\nby way of a disguised \u201cinterest only financing product,\u201d in order to allow Plaintiffs to obtain typical\n\ndebt for the redevelopment portion of the project.\n\n 79. Defendant acquired Hudson after Plaintiffs had already contracted to purchase\n\nHudson. After direct assignment of the Purchase and Sale Agreement, Defendant acquired Hudson\n\nand simultaneously entered into the Purported Ground Lease with Plaintiffs. Moreover, CSC\u2014\n\nwhich owned all of the equity interests in Plaintiffs\u2014was required to pay all of the costs ancillary\n\nto the transaction, including Defendant\u2019s diligence costs and a $595,000 payment to GLR for\n\n\u201cadvisory and consulting services.\u201d It is very unusual for a landlord to require its tenant to pay\n\nsuch a fee for leasing space; however, it is typical for a lender to require payments for such\n\nfinancing fees, as Defendant required the Plaintiffs to do here.\n\n\n\n\n14\n See GLR Ground Lease, supra fn. 6.\n[Link-to-previous setting changed from off in original to on in modified.].\n 49\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 54 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 80. In the Purported Ground Lease itself, Defendant notes that the up-front payment of\n\n$36.85 million was \u201cin connection with . . . [Defendant\u2019s] acquisition of the Leased Premises\u201d\n\n(resulting in an LTV ratio of approximately 82%), not some sort of security deposit or genuine\n\nprepaid rent that would be credited to future rent payments. See Ex. A, \u00a7 4(i) (emphasis added).\n\n 81. Defendant also announced to the world that the Purported Ground Lease was used\n\nto \u201cacquire\u201d the Hudson and \u201cfacilitate\u201d the redevelopment by providing Plaintiffs \u201ca lower\n\nblended cost of capital.\u201d\n\n 3. The Transaction Was Denoted as a Purported Ground Lease\n for Tax Purposes.\n\n 82. Upon information and belief, Defendant structured the Ground Lease to protect its\n\ninvestors from tax consequences and/or to secure certain tax advantages.\n\n 83. Upon information and belief, Defendant enjoys tax advantages by reclassifying\n\npayments under the Purported Ground Lease as \u201cPrepaid Rent,\u201d including the upfront payment\n\nand the Right-Size Payment that can be treated as a loan for tax purposes permitting Defendant to\n\nspread out its realization of such income over time pursuant to 28 U.S.C. \u00a7 467. Such payments\n\nwould be subject to less advantageous tax treatment in the typical financing context when\n\nclassified as a financing fee or equity cure payment.\n\n 4. Plaintiffs Assumed All of the Obligations Typical of Ownership.\n 84. As noted above, Plaintiffs assumed virtually all of the obligations that would be\n\nexpected by an owner of the fee interest in the real estate.\n\n 85. Plaintiffs are required under the Purported Ground Lease to, among other things,\n\n(i) obtain insurance at amounts set by Defendant and name Defendant as an additional insured,\n\n(ii) pay utilities, (iii) pay real estate taxes, (iv) obtain all necessary licenses and permits with\n\ngovernment regulators, and (v) keep the Hudson clear of liens.\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 50\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 55 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 86. Moreover, the Purported Ground Lease provides for a waterfall of any award in the\n\nevent of condemnation where a portion of such proceeds go to Plaintiffs in proportion with the fair\n\nmarket value of the purported \u201cLeasehold Estate.\u201d See Ex. A, \u00a7 14.\n\n 87. While these terms may be understood to apply in commercial real estate ground\n\nleases, they should be viewed here in conjunction with the other indicia of a disguised financing\n\narrangement, all meant to benefit Defendant. In other words, a true ground lease might contain\n\nthese terms, but it would not also require tens of millions of dollars in upfront and balloon\n\npayments without any adjustment of the rent based on the fair market value of the Hudson.\n\n 5. The Parties Intended To Enter Into a Financing Arrangement.\n\n 88. By entering into the Purported Ground Lease, the Parties actually intended to enter\n\ninto a financial arrangement.\n\n 89. This is made clear by MSP and GLR\u2019s own public statements describing their\n\nground lease schemes as utilizing \u201cground lease capital,\u201d as a \u201cfinancing product,\u201d and as a\n\n\u201ccompelling financing solution.\u201d\n\n 90. Moreover, the \u201cProject Budget\u201d agreed to by Defendant lists the Purported Ground\n\nLease as a source of capital for financing the purchase and redevelopment of Hudson along with\n\nthe Loan and Plaintiffs\u2019 equity. See Project Budget, Schedule 1 to Purported Ground Lease, Ex. A\n\nat 156.\n\n 91. Indeed, the unique nature of the Purported Ground Lease instructs that it is not a\n\n\u201cground lease\u201d at all. The term \u201cground lease\u201d typically describes a lease of unimproved land on\n\nwhich improvements are to be built by the tenant or a lease of improved real estate that covers the\n\nland but not the improvements, which are owned by the tenant. The Purported Ground Lease is\n\nneither of those things. Here, the Property is split into various Condominium units, of which only\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 51\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 56 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nthree are encompassed by the Purported Ground Lease. The Condominium Declaration establishes\n\nthe Common Elements, including the land, and each of the six Condominium Unit owners has a\n\nspecified undivided interest in such Common Elements\u2014not Defendant Instead, the Purported\n\nGround Lease is a financing arrangement.\n\n COUNT I\n\n Declaration that Purported Declaratory Judgment\n That The Ground Lease isIs Not a True Lease Under 11 U.S.C. \u00a7 365\n\n 92.98. PlaintiffsThe Debtors restate and incorporate by reference the above paragraphs 1\n\nthrough 9197 as if set forth fully herein.\n\n 93.99. Plaintiffs respectfully request that this Court invoke its equitable powers to look\n\nthrough the form of the Purported Ground Lease to its substance. Specifically, Plaintiffs request\n\nthat the Court find and declare that the Purported As set forth in detail above, the Ground Lease\n\nisa disguised financing arrangement and not a true leas. Plaintiffse and, instead, is: (a) an\n\ninstrument in connection with a loan from the Defendant to the Debtors to finance the Acquisition\n\nTransaction, with the Debtors owning the Condominium Units and owing the Defendant the\n\nbalance of its loan; or (b) an instrument in connection with a joint-purchase transaction, creating a\n\ntenancy in common among the Debtors and the Defendant with respect to the purchased Property.\n\nAccordingly, the Debtors request that the Court order that the interests created by thePurported\n\nGround Lease are properly excluded from application of any Bankruptcy Codesection is sections\n\npertinent to leases, including but not limited to Bankruptcy Codesections section 36 and 11235.\n\n 94.100. Plaintiffs anticipate that Defendant will attempt to seek relief pursuant\n\ntoThe Defendant has already asserted that the Ground Lease is governed by Bankruptcy Code\n\nsectionssection 365(d)(3) and (d)(4)4) and has appealed the Court\u2019s ruling dated April 22, 2026 in\n\nthe Chapter 11 Cases that the Ground Lease, if a true lease, is governed instead by Bankruptcy\n[Link-to-previous setting changed from off in original to on in modified.].\n 52\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 57 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\nCode section 365(d)(2). The Debtors anticipate that the Defendant will also attempt to seek other\n\nrelief pursuant to Bankruptcy Code section 365 in its ostensible role as \u201clessor\u201d under the\n\nPurported Ground Lease or seek to terminate the Purported Ground Lease. Therefore, an actual\n\ncase or controversy exists between Plaintiffs andthe Debtors and the Defendant.15\n\n 95.101. The controversy is genuine and definite. Whether the Purported Ground\n\nLease is a true lease, or instead a disguised financing vehicle will materially impact Plaintiffsthe\n\nDebtors\u2019 rights in its chapterthe Chapter 11 proceedingsCases, including under any future chapter\n\n11 plans.\n\n 96. Pursuant to Bankruptcy Code section 105 and 28 U.S.C. \u00a7\u00a7 2201 & 2202, Plaintiffs\n\nseek a declaratory judgement that the Purported Ground Lease is not an enforceable true lease and\n\nis instead a disguised financing agreement.\n\n 97. In the event that this Court finds that Bankruptcy Code section 365 is applicable to\n\nthe Purported Ground Lease as a true lease, Plaintiffs alternatively request leave to seek this\n\nCourt\u2019s approval to assume the Purported Ground Lease pursuant to Bankruptcy Code section\n\n365(a) and Rule 6006 of the Federal Rules of Bankruptcy Procedure.\n\n COUNT II\n\n Avoidance of Fraudulent Transfer \u2013 (Fourth Amendment)\n Pursuant to 11 U.S.C. \u00a7 548(a)(1)(B) \u2013 Constructive Fraud\n\n 98.102. PlaintiffsThe Debtors restate and incorporate by reference the above\n\nparagraphs 1 through 97101 as if set forth fully herein.\n\n 103. As set forth in detail above, the Debtors (a) were insolvent at the time the Fourth\n\nAmendment was executed in March 2024, (b) had unreasonably small capital to permit entering\n\n\n\n15\n Plaintiffs reserve all rights to argue in the alternative that Bankruptcy Code sections 365(d)(3) and (d)(4) do not\napply to the Purported Ground Lease on any other grounds.\n[Link-to-previous setting changed from off in original to on in modified.].\n 53\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 58 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\ninto the Fourth Amendment, and (c) incurred debts pursuant to the Fourth Amendment beyond the\n\nDebtors\u2019 ability to pay.\n\n 104. Further, pursuant to the Fourth Amendment, the Debtors transferred significant\n\nvalue to the Defendant, receiving no reasonably equivalent value in exchange. Specifically, the\n\nFourth Amendment: (a) increased annual rent by $2.35 million (from $6.4 million to $8.75\n\nmillion), representing a substantial transfer of value over the remaining 95-year term of the Ground\n\nLease; (b) imposed a $65 million Right-Size Payment due in 2032 that the insolvent Debtors could\n\nnot conceivably fund; and (c) accelerated rent adjustment intervals from every 10 years to every 5\n\nyears. The only purported consideration, a buy-back option requiring approximately $52 million\n\nto restore the original rent level, was illusory because the insolvent Debtors did not have and could\n\nnot obtain $52 million, and the buy-back was itself above market value as measured by\n\ncapitalization rates.\n\n 99. Plaintiffs request that the Court find that that the Fourth Amendment, any transfer\n\nthereunder or in connection with, and any obligations incurred thereby are avoidable as a\n\nconstructive fraudulent transfer or obligation under 11 U.S.C. \u00a7 548(a)(1)(B).\n\n 100. In connection with the Fourth Amendment, Plaintiffs incurred obligations to pay to\n\nDefendant approximately 36% in increased \u201crent\u201d payments and an increased Right-Size Payment\n\nas compared to the original Purported Ground Lease.\n\n 101. In exchange, Plaintiffs received a Buyback Option and are not required to pay the\n\n(increased) Right-Size Payment until the tenth lease year as compared to the fifth lease year under\n\nthe original Purported Ground Lease. This consideration received by Plaintiffs was far less than\n\nthe reasonably equivalent value of the 36%-increased \u201crent\u201d payments and Right-Size Payment to\n\nbe received by Defendant under the Fourth Amendment.\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 54\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 59 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 102. Plaintiffs were insolvent (or were rendered insolvent) at the time the Parties entered\n\ninto the Fourth Amendment. At that time, Plaintiffs\u2019 monetary obligations, including monthly\n\n\u201crent\u201d payments under the Purported Ground Lease, and obligations owing to the Prepetition\n\nLender and construction of the redevelopment project was (and remains) stalled indefinitely due\n\nto the HPD\u2019s finding of harassment of the SRO Tenants.\n\n 103. At a minimum, Plaintiffs increased payment obligations to Defendant under the\n\nFourth Amendment left them with an ever-shrinking unreasonably small amount of capital to\n\nadequately fund the construction of the redevelopment project.\n\n 104. Plaintiffs also incurred the increased payment obligations to Defendant under the\n\nFourth Amendment despite the fact that construction was stalled and that Plaintiffs believed they\n\nwould be unable to pay the increased \u201crent\u201d payments and Right-Size Payment when those debts\n\nmatured\u2014let alone the outstanding balance of the Loan quickly approaching the maturity date.\n\n 105. Accordingly, Plaintiffs did not receive reasonably equivalent value in exchange for\n\nany of these transfers and obligations, and each of the Plaintiffs: (a) was insolvent on the date that\n\neach transfer and obligation was made; (b) became insolvent as a result of these transfers and\n\nobligations; (c) engaged or was about to engage in a business or a transaction for which the\n\nremaining assets of the Plaintiff were unreasonably small in relation to the business or transaction;\n\nor (d) intended to incur, believed that they would incur, or reasonably should have believed that\n\nthey would incur debts that would be beyond the Plaintiffs\u2019 ability to repay as such debts became\n\ndue.\n\n 106.105. PlaintiffsThe Debtors entered into the Fourth Amendment under threat of\n\ntermination of the Purported Ground Lease by the Defendant and thus were compelled to accept\n\nits terms.\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 55\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 60 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 107.106. Accordingly, the transfer and obligations incurred underDebtors request\n\nthat the Court find and declare that that the Fourth Amendment, any transfers thereunder or in\n\nconnection therewith, and any obligations incurred thereby are avoidable and are avoided as\n\nconstructive fraudulent transfers under Sectionpursuant to 11 U.S.C. \u00a7 548(a)(1)(B) of the\n\nBankruptcy Code(i), (ii)(I), (ii)(II), and (ii)(III).\n\n COUNT III\n\n Avoidance of Fraudulent Transfer \u2013 (Fourth Amendment)\n Pursuant to 11 U.S.C. \u00a7 544(b)(1) \u2013 New York Uniform Voidable Transactions Act\n\n 108.107. PlaintiffsThe Debtors restate and incorporate by reference the above\n\nparagraphs 1 through 107106 as if set forth fully herein.\n\n 109.108. Section 544(b)(1) of the Bankruptcy Code provides that the trustee \u201cmay\n\navoid any transfer of an interest in property or any obligation incurred by the debtor that is voidable\n\nunder applicable law by a creditor by a creditor holding an unsecured claim . . . .\u201d 11 U.S.C. \u00a7\n\n544(b)(1).\n\n 110.109. The Fourth Amendment, any transfertransfers thereunder or in connection\n\ntherewith, and any obligations incurred thereby are avoidable transfers under the New York\n\nUniform Voidable Transactions Act, N.Y. Debt. and Cred. Law Art. \u00a7 270(a)(2).\n\n 111.110. Each of these transfers and obligations is avoidable by creditors who hold\n\nallowable unsecured claims, including creditors who were creditors before the transfers were made\n\nand obligations incurred.\n\n 112.111. PlaintiffsThe Debtors request that the Court find and declare that the Fourth\n\nAmendment, any transfertransfers thereunder or in connection therewith, and any obligations\n\nincurred thereby are avoidable transfers and are avoided pursuant to 11 U.S.C. \u00a7 544(b)(1) and the\n\nNew York Uniform Voidable Transactions Act, N.Y. Debt. and Cred. Law Art. \u00a7 270(a)(2).\n[Link-to-previous setting changed from off in original to on in modified.].\n 56\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 61 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n 113. Plaintiffs request that the Court find that that the Fourth Amendment, any transfer\n\nthereunder or in connection therewith, and any obligations incurred thereby are avoidable as a\n\nconstructive fraudulent transfer or obligation under 11 U.S.C. \u00a7 544(b)(1).\n\n COUNT IV\n\n Recovery of Fraudulent Transfer Pursuant\n to 11 U.S.C. \u00a7\u00a7 544(b)(1), 548(a)(1)(B) and 550(a)\n\n 114.112. PlaintiffsThe Debtors restate and incorporate by reference the above\n\nparagraphs 1 through 113111 as if set forth fully herein.\n\n 115.113. Section 550(a) of the Bankruptcy Code provides that if a transfer is avoided\n\nunder section 544 or 548 of the Bankruptcy Code, Plaintiffs maythe debtor or trustee may (subject\n\nto certain exceptions in other subparagraphs of section 550 that are inapplicable here) recover the\n\nproperty transferred from Plaintiff to Defendantthe initial transferee or any immediate or mediate\n\ntransferee of such initial transferee.\n\n 116.114. Under the Fourth Amendment, the Defendant has received monthly \u201crent\u201d\n\npayments and continues to receive monthly \u201crent\u201d payments of $729,166.67\u2014$195,833.34 per\n\nmonth above-and-beyond what it would have received under the original Purported Ground Lease.\n\n 117. Those payments were avoidable transfers under sections 544 and/or 548 of the\n\nBankruptcy Code and are recoverable by the Plaintiffs\u2019 bankruptcy estates under section 550 of\n\nthe Bankruptcy Code.\n\n 115. The Debtors request that the Court find and declare that, having declared that those\n\n\u201crent\u201d payments are avoidable transfers and are avoided under section 544 and/or 548 of the\n\nBankruptcy Code, they are recoverable by the Debtors\u2019 bankruptcy estates from the Defendant and\n\nany immediate or mediate transferee of the Defendant under section 550(a) of the Bankruptcy\n\nCode.\n[Link-to-previous setting changed from off in original to on in modified.].\n 57\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 62 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n COUNT V\n\n Disallowance of Defendant\u2019s Claims Pursuant to 11 U.S.C. \u00a7 502(d)\n\n 118.116. PlaintiffsThe Debtors restate and incorporate by reference the above\n\nparagraphs 1 through 117115 as if set forth fully herein.\n\n 119. The increased \u201crent\u201d payments under the Fourth Amendment are recoverable\n\ntransfers under Section 550 of the Bankruptcy Code and those transfers and/or obligations of the\n\nFourth Amendment are avoidable under sections 544 and/or 548 of the Bankruptcy Code.\n\n 120.117. The Defendant has not paidrepaid to the Debtors\u2019 estates the amounts\n\ntransferred for which Defendant is liable under Section 550 of the Bankruptcy Codeavoided\n\npursuant to Counts II and III above.\n\n 121.118. Accordingly, under Section the Debtors request that the Court find and\n\ndeclare that, pursuant to section 502(d) of the Bankruptcy Code, any filed or scheduled claims in\n\nthe Chapter 11 Cases held by the Defendant or any affiliate or assignee are disallowed until the\n\nDefendant pays in full to the Debtors\u2019 estates the amounts for which it is liable under section 550\n\nof the Bankruptcy CodeCounts II-IV above.\n\n PRAYER FOR RELIEF\n\n WHEREFORE, Plaintiffsthe Debtors pray that the Court enter judgment in their favor and\n\nagainst the Defendant as follows:\n\n A. Entering a Declaration that the Purported Ground Lease is not a true lease;\n\n B. Entering a Declaration thethat any Bankruptcy Code sections 365 and, in particular,\n\nsections 365(d)(3) and (4) are section applicable to leases, including but not limited to Bankruptcy\n\nCode section 365, is not applicable to the Purported Ground Lease;\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 58\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 63 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n C. Determining, in this or a supplemental proceeding permitting the participation of\n\nother directly-affected putative secured creditors, that the Ground Lease is (a) an instrument in\n\nconnection with a loan from the Defendant to the Debtors to finance the Acquisition Transaction,\n\nwith the Debtors owning the Condominium Units and owing the Defendant the balance of its loan;\n\nor (b) an instrument in connection with a joint-purchase transaction, creating a tenancy in common\n\namong the Debtors and the Defendant with respect to the Property.\n\n D. Determining, in this proceeding or a supplemental proceeding, the validity, priority,\n\nand extent of any equitable lien of the Defendant in the Property, pursuant to Bankruptcy Rule\n\n7001(b);\n\n C.E. DeterminingEntering a Declaration that the Fourth Amendment is avoidable and is\n\navoided as a constructive fraudulent transfer under 11 U.S.C.sections 544(b)(1) and 548(a)(1)(B)\n\nof the Bankruptcy Code;\n\n D.F. Ordering Defendantsthe Defendant to repay to the Debtors, pursuant to section\n\n550(a) of the Bankruptcy Code, the additional \u201crent\u201d amounts paid under the Fourth Amendment\n\nabove-and-beyond what theyit would have received under the original Purported Ground Lease in\n\nan amount to be determined at trial, plus pre- and post-judgment interest;\n\n E. Determining that the Purported Ground Lease is a disguised financing;\n\n F. Determining that the value of the property securing the disguised financing at an\n\namount to be determined at trial;\n\n G. Declaring the terms of the financing based on a principal balance due as of the\n\nPetition Date in an amount to be determined at trial;\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 59\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 64 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n H.G. Disallowing any claims of the Defendant or any affiliate or assignee in the Chapter\n\n11 Cases until the excess payments under the Fourth Amendment are repaid to Plaintiffs under 11\n\nU.S.C. \u00a7the Debtors, pursuant to section 502(d) of the Bankruptcy Code; and\n\n\n\n\n [Remainder of Page Intentionally Left Blank]\n\n\n\n\n I.H. Granting such other relief as itthe Court deems necessaryjust and proper.\n\n\n\n Dated: December 22, 2025 CHIPMAN BROWN CICERO & COLE, LLP\n DATED: Wilmington, Delaware\n June 10, 2026\n /s/ William E. Chipman, Jr.______________\n[Link-to-previous setting changed from off in original to on in modified.].\n 60\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 65 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n William E. Chipman, Jr. (No. 3818)\n Mark D. Olivere (No. 4291)\n Aaron J. Bach (No. 7364)\n Alison R. Maser (No. 7430)\n Hercules Plaza\n 1313 North Market Street, Suite 5400\n Wilmington, Delaware 19801\n Telephone: (302) 295-0191\n Email: chipman@chipmanbrown.com\n olivere@chipmanbrown.com\n bach@chipmanbrown.com\n maser@chipmanbrown.com\n\n -and-\n\n DLA PiperBOIES SCHILLER FLEXNER LLP\n (US)\n /s/ Stuart M. Brown\n Stuart M. Brown (DE No. 4050)\n DLA Piper LLP (US)\n 1201 North Market Street, Suite 1200\n Wilmington, Delaware 19801\n Telephone: (302) 468-5700\n Facsimile: (302) 394-2341\n Email: stuart.brown@us.dlapiper.com\n - and -\n\n Neal Kronley (Robert Gordon (admitted pro hac vice\n application pending)\n DavidMichael M. RileyFay (admitted pro hac vice\n application pending)\n Caleb B. Roche (Jenny H. Kim (admitted pro hac\n vice application pending)\n Sabina Mariella (admitted pro hac vice)\n 55 Hudson Yards\n DLA Piper LLP (US)\n 1251 Avenue of the Americas\n New York, New York 1002010001\n Telephone: (212) 335-4500446-2300\n Facsimile: (212) 335-4501\n Email: neal.kronley@us.dlapiper\n rgordon@bsfllp.com\n mfay@bsfllp.com\n david.riley@us.dlapiperjkim@bsfllp.com\n caleb.roche@us.dlapipersmariella@bsfllp.com\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 61\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 66 of 67\n[Link-to-previous setting changed from off in original to on in modified.].\n\n\n Proposed Special Counsel to thefor Debtors and\n Debtors in Possession\n\n\n\n\n[Link-to-previous setting changed from off in original to on in modified.].\n 62\n\f Case 25-52471-KBO Doc 101-1 Filed 08/11/26 Page 67 of 67\n\n\n\n\n Summary report:\n Litera Compare for Word 11.9.1.1 Document comparison done on\n 8/11/2026 9:15:22 AM\nStyle name: Default Style\nIntelligent Table Comparison: Active\nOriginal filename: Hudson - Lease Recharacterization Adversary Complaint (v.\n2025.12.22).docx\nModified filename: Hudson 1701 - Amended Recharacterization\nComplaint_260610_FINAL.docx\nChanges:\nAdd 566\nDelete 479\nMove From 33\nMove To 33\nTable Insert 0\nTable Delete 0\nTable moves to 0\nTable moves from 0\nEmbedded Graphics (Visio, ChemDraw, Images etc.) 2\nEmbedded Excel 0\nFormat changes 0\nTotal Changes: 1113\n\f","ocr_status":1,"date_upload":"2026-09-04T11:20:13.398194-07:00","document_number":"101","attachment_number":1,"pacer_doc_id":"042023132040","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit A","acms_document_guid":""}],"date_created":"2026-08-11T07:35:03.096235-07:00","date_modified":"2026-08-13T08:46:53.523404-07:00","date_filed":"2026-08-11","time_filed":"10:21:27","entry_number":101,"recap_sequence_number":"2026-08-11.001","pacer_sequence_number":354,"description":"Exhibit(s) // Notice of Filing Redline of Amended Complaint (related document(s)1, 91) Filed by Hudson 1701/1706, LLC. (Attachments: # 1 Exhibit A) (Chipman, William) (Entered: 08/11/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/473406846/","id":473406846,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/488871848/","id":488871848,"tags":[],"absolute_url":"/docket/72070200/100/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-08-05T16:01:21.737352-07:00","date_modified":"2026-08-05T16:01:21.774853-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"100","attachment_number":null,"pacer_doc_id":"042023124969","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Certificate of Service","acms_document_guid":""}],"date_created":"2026-08-05T16:01:21.676172-07:00","date_modified":"2026-08-13T08:46:53.501770-07:00","date_filed":"2026-08-05","time_filed":"18:59:50","entry_number":100,"recap_sequence_number":"2026-08-05.001","pacer_sequence_number":351,"description":"Certificate of Service re: The Debtors' Opposition to the Defendant's Motion to Dismiss the Amended Complaint (related document(s)97) Filed by Kurtzman Carson Consultants, LLC dba Verita Global. (Kass, Albert) (Entered: 08/05/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/473013092/","id":473013092,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/488466831/","id":488466831,"tags":[],"absolute_url":"/docket/72070200/99/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-08-03T08:02:43.898300-07:00","date_modified":"2026-09-09T16:03:39.787287-07:00","sha1":"f09f2fc09221d0fc31dee9923285a0b3b9c2086a","page_count":2,"file_size":210272,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.99.0.pdf","filepath_ia":"","ia_upload_failure_count":2,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 99 Filed 08/03/26 Page 1 of 2\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\n In re: Chapter 11\n\n HUDSON 1701/1706, LLC, et al., 1 Case Nos. 25-11853(KBO)\n\n Debtors. (Jointly Administered)\n\n\n\n HUDSON 1701/1706, LLC, a Delaware limited\n liability company; and HUDSON 1702, LLC, a Adv. Proc. No. 25-52471 (KBO)\n Delaware limited liability company,\n Re: Docket No. 98\n\n Plaintiffs,\n\n v.\n\n\n 356W58 GROUND LESSOR LLC, a Delaware\n limited liability company,\n\n\n\n Defendant.\n\n\n ORDER APPROVING STIPULATED SCHEDULE RE: MOTION TO DISMISS\n\n Upon the Certification of Counsel filed by the Debtors, and the Stipulation attached hereto\n\nas Exhibit A (the \u201cStipulation\u201d) regarding 356W58 Ground Lessor LLC\u2019s Motion to Dismiss the\n\nAmended Complaint [Docket No. 93] (the \u201cMotion to Dismiss\u201d); and good and sufficient cause\n\nappearing therefor;\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 mailing address is c/o FTI\nConsulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the Americas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 99 Filed 08/03/26 Page 2 of 2\n\n\n\n\n IT IS HEREBY ORDERED THAT:\n\n 1. The Stipulation is hereby APPROVED as set forth herein.\n\n 2. The schedule for the Motion to Dismiss shall be as follows:\n\nSCHEDULE\n\n Deadline for Ground Lessor to file Motion to July 9, 2026\n Dismiss\n Deadline for Debtors to file Opposition to July 30, 2026\n Motion to Dismiss\n Deadline for Ground Lessor to file Reply in August 13, 2026\n further support of Motion to Dismiss\n Oral Argument September 9, 2026\n\n\n 3. The Court shall retain jurisdiction with respect to all matters arising from or related\n\nto the implementation of this Order.\n\n\n\n\n Dated: August 3rd, 2026 KAREN B. OWENS\n Wilmington, Delaware CHIEF JUDGE\n\f","ocr_status":2,"date_upload":"2026-09-04T11:18:29.227802-07:00","document_number":"99","attachment_number":null,"pacer_doc_id":"042023119341","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492580676/","id":492580676,"tags":[],"absolute_url":"/docket/72070200/99/1/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T11:18:23.238321-07:00","date_modified":"2026-09-09T12:48:42.286182-07:00","sha1":"9c7f20408af5c9cceaf174d1cc360962b0ae1467","page_count":4,"file_size":214133,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.99.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.99.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 25-52471-KBO Doc 99-1 Filed 08/03/26 Page 1 of 4\n\n\n\n\n EXHIBIT A\n\f Case 25-52471-KBO Doc 99-1 Filed 08/03/26 Page 2 of 4\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\n In re: Chapter 11\n\n HUDSON 1701/1706, LLC, et al., 1 Case Nos. 25-11853(KBO)\n\n Debtors. (Jointly Administered)\n\n\n\n HUDSON 1701/1706, LLC, a Delaware limited\n liability company; and HUDSON 1702, LLC, a Adv. Proc. No. 25-52471(KBO)\n Delaware limited liability company,\n\n\n Plaintiffs,\n\n v.\n\n\n 356W58 GROUND LESSOR LLC, a Delaware\n limited liability company,\n\n\n\n Defendant.\n\n\n STIPULATED SCHEDULE RE:\n 356W58 GROUND LESSOR LLC\u2019S MOTION TO DISMISS\n THE AMENDED COMPLAINT [DOCKET NO. 93]\n\n The above-captioned debtors and debtors-in-possession (the \u201cDebtors\u201d) and 356W58\nGround Lessor LLC (\u201cGround Lessor\u201d) (collectively, the \u201cParties\u201d) hereby stipulate and agree\nthat the schedule set forth herein shall govern with regard to 356W58 Ground Lessor LLC\u2019s Motion\nto Dismiss the Amended Complaint [Docket No. 93] (the \u201cMotion to Dismiss\u201d), absent further\nOrder of the Court or the agreement of the Parties:\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 mailing address is c/o FTI\nConsulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the Americas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 99-1 Filed 08/03/26 Page 3 of 4\n\n\n\n\nSCHEDULE\n\n Deadline for Ground Lessor to file Motion to July 9, 2026\n Dismiss\n Deadline for Debtors to file Opposition to July 30, 2026\n Motion to Dismiss\n Deadline for Ground Lessor to file Reply in August 13, 2026\n further support of Motion to Dismiss\n Oral Argument September 9, 2026\n\n\n Except as specifically set forth herein, all rights, claims and defenses of the Parties are\nhereby fully preserved.\n\n\n [Signature Page to Follow]\n\n\n\n\n 2\n\f Case 25-52471-KBO Doc 99-1 Filed 08/03/26 Page 4 of 4\n\n\n\n\nIT IS SO STIPULATED.\n\nDated: July 30, 2026\n\nRespectfully submitted,\n\n LANDIS RATH & COBB LLP CHIPMAN BROWN CICERO & COLE,\n LLP\n\n /s/ Matthew B. McGuire_____ /s/ William E. Chipman, Jr. _________\n Adam G. Landis (No. 3407) William E. Chipman, Jr. (No. 3818)\n Matthew B. McGuire (No. 4366) Mark D. Olivere (No. 4291)\n Katherine S. Dute (No. 6788) Aaron J. Bach (No. 7364)\n Soumya P. Venkateswaran (No. 7278) Alison R. Maser (No. 7430)\n 919 Market Street, Suite 1800 Hercules Plaza\n Wilmington, Delaware 19801 1313 North Market Street, Suite 5400\n Telephone: (302) 467-4400 Wilmington, Delaware 19801\n Facsimile: (302) 467-4450 Telephone: (302) 295-0191\n Email: landis@lrclaw.com Email: chipman@chipmanbrown.com\n mcguire@lrclaw.com olivere@chipmanbrown.com\n dute@lrclaw.com bach@chipmanbrown.com\n venkateswaran@lrclaw.com maser@chipmanbrown.com\n\n -and- -and-\n\n ADLER & STACHENFELD LLP BOIES SCHILLER FLEXNER LLP\n Kirk L. Brett (admitted pro hac vice) Robert D. Gordon (admitted pro hac vice)\n Patrick O\u2019Connor (admitted pro hac vice) Michael M. Fay (admitted pro hac vice)\n 555 Madison Avenue, 6th floor Jenny H. Kim (admitted pro hac vice)\n New York, New York 10022 Sabina Mariella (admitted pro hac vice)\n Telephone: (212)883-1700 Jeffrey Waldron (admitted pro hac vice\n Facsimile: (212)883-8883 Katherine Zhang (admitted pro hac vice)\n Email: kbrett@adstach.com 55 Hudson Yards\n poconnor@adstach.com New York, New York 10001\n Telephone: (212) 446-2300\n Counsel for 356W58 Ground Lessor LLC Email: rgordon@bsfllp.com\n mfay@bsfllp.com\n\n Counsel for Debtors and Debtors in\n Possession\n\n\n\n\n 3\n\f","ocr_status":1,"date_upload":"2026-09-04T11:18:58.004001-07:00","document_number":"99","attachment_number":1,"pacer_doc_id":"042023119342","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit A","acms_document_guid":""}],"date_created":"2026-08-03T08:02:43.877297-07:00","date_modified":"2026-09-04T06:50:32.638580-07:00","date_filed":"2026-08-03","time_filed":"10:47:18","entry_number":99,"recap_sequence_number":"2026-08-03.001","pacer_sequence_number":345,"description":"Order Approving Stipulated Schedule Re: Motion To Dismiss (related document(s)98) Order Signed on 8/3/2026. (Attachments: # 1 Exhibit A) (CEB) (Entered: 08/03/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/472809157/","id":472809157,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/488254630/","id":488254630,"tags":[],"absolute_url":"/docket/72070200/98/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-07-31T08:30:45.369723-07:00","date_modified":"2026-09-10T17:05:45.618823-07:00","sha1":"8271a4254417d33620bdf4407f56704ddebd7264","page_count":2,"file_size":176264,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.98.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.98.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 98 Filed 07/31/26 Page 1 of 2\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\n In re: Chapter 11\n\n HUDSON 1701/1706, LLC, et al., 1\n Case Nos. 25-11853(KBO)\n Debtors.\n\n (Jointly Administered)\n\n HUDSON 1701/1706, LLC, a Delaware limited\n liability company; and HUDSON 1702, LLC, a Adv. Proc. No. 25-52471 (KBO)\n Delaware limited liability company,\n\n\n Plaintiffs,\n\n v.\n\n\n 356W58 GROUND LESSOR LLC, a Delaware\n limited liability company,\n\n\n\n Defendant.\n\n\n CERTIFICATION OF COUNSEL REGARDING\n STIPULATED SCHEDULE RE: MOTION TO DISMISS\n\n 1. The undersigned hereby certifies that the above-captioned debtors and debtors-in-\n\npossession (the \u201cDebtors\u201d) and 356W58 Ground Lessor LLC (\u201cGround Lessor\u201d) have entered\n\ninto a stipulation (the \u201cStipulation\u201d) that, subject to approval of the Court, agrees on a schedule\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 mailing address is c/o FTI\nConsulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the Americas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 98 Filed 07/31/26 Page 2 of 2\n\n\n\n\nwith regard to 356W58 Ground Lessor LLC\u2019s Motion to Dismiss the Amended Complaint [Docket\n\nNo. 93] (the \u201cMotion to Dismiss\u201d).\n\n 2. A copy of the Stipulation is attached as Exhibit A to the proposed order annexed\n\nhereto as Exhibit 1 (the \u201cProposed Order\u201d).\n\n WHEREFORE, the Debtors and Ground Lessor respectfully request that the Court enter\n\nthe Proposed Order at its earliest convenience.\n\n\n Date: July 31, 2026 CHIPMAN BROWN CICERO & COLE, LLP\n Wilmington, Delaware\n /s/ William E. Chipman, Jr.\n William E. Chipman, Jr. (No. 3818)\n Mark D. Olivere (No. 4291)\n Aaron J. Bach (No. 7364)\n Alison R. Maser (No. 7430)\n Hercules Plaza\n 1313 North Market Street, Suite 5400\n Wilmington, Delaware 19801\n Telephone: (302) 295-0191\n Email: chipman@chipmanbrown.com\n olivere@chipmanbrown.com\n bach@chipmanbrown.com\n maser@chipmanbrown.com\n\n -and-\n\n BOIES SCHILLER FLEXNER LLP\n Robert D. Gordon (admitted pro hac vice)\n Michael M. Fay (admitted pro hac vice)\n Jenny H. Kim (admitted pro hac vice)\n Sabina Mariella (admitted pro hac vice)\n 55 Hudson Yards (admitted pro hac vice)\n New York, New York 10001\n Telephone: (212) 446-2300\n Email: rgordon@bsfllp.com\n mfay@bsfllp.com\n jkim@bsfllp.com\n smariella@bsfllp.com\n\n Counsel for Debtors and Debtors in Possession\n\n\n\n 2\n\f","ocr_status":2,"date_upload":"2026-09-04T11:17:07.387989-07:00","document_number":"98","attachment_number":null,"pacer_doc_id":"042023116166","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Certification of Counsel for Approval of Proposed Scheduling Order","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492580468/","id":492580468,"tags":[],"absolute_url":"/docket/72070200/98/1/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T11:16:59.118158-07:00","date_modified":"2026-09-08T07:13:03.414288-07:00","sha1":"","page_count":7,"file_size":157107,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"98","attachment_number":1,"pacer_doc_id":"042023116167","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Proposed Form of Order","acms_document_guid":""}],"date_created":"2026-07-31T08:30:45.342567-07:00","date_modified":"2026-09-04T06:50:32.621825-07:00","date_filed":"2026-07-31","time_filed":"11:04:40","entry_number":98,"recap_sequence_number":"2026-07-31.001","pacer_sequence_number":343,"description":"Certification of Counsel for Approval of Proposed Scheduling Order Filed by Hudson 1701/1706, LLC. (Attachments: # 1 Proposed Form of Order) (Chipman, William) (Entered: 07/31/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/472703956/","id":472703956,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/488146081/","id":488146081,"tags":[],"absolute_url":"/docket/72070200/97/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-07-30T12:33:15.656770-07:00","date_modified":"2026-09-09T12:15:09.191675-07:00","sha1":"cab6f39a8dd03cd4d4730e4744b0a643012c9b24","page_count":26,"file_size":596771,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.97.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.97.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 1 of 26\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\n In re: Chapter 11\n\n HUDSON 1701/1706, LLC, et al., 1\n Case Nos. 25-11853(KBO)\n Debtors.\n\n (Jointly Administered)\n\n HUDSON 1701/1706, LLC, a Delaware limited\n liability company; and HUDSON 1702, LLC, a Adv. Proc. No. 25-52471 (KBO)\n Delaware limited liability company,\n\n\n Plaintiffs,\n\n v.\n\n\n 356W58 GROUND LESSOR LLC, a Delaware\n limited liability company,\n\n\n\n Defendant.\n\n\n THE DEBTORS\u2019 OPPOSITION TO DEFENDANT\u2019S\n MOTION TO DISMISS THE AMENDED COMPLAINT\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax\nidentification number, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The\nDebtors\u2019 mailing address is c/o FTI Consulting, Inc. Attn: Alan Tantleff, 1166 Avenue of the\nAmericas, 15th Floor, New York, NY 10036.\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 2 of 26\n\n\n\n\n TABLE OF CONTENTS\nTABLE OF AUTHORITIES........................................................................................................... ii\n\nPRELIMINARY STATEMENT...................................................................................................... 1\n\nBACKGROUND ............................................................................................................................ 4\n\nI. Procedural History .............................................................................................................. 4\n\nII. The Amended Complaint .................................................................................................... 5\n\nLEGAL STANDARD ..................................................................................................................... 5\n\nARGUMENT .................................................................................................................................. 5\n\nI. The Amended Complaint Sufficiently Alleges A Claim For Recharacterization Of\n The Ground Lease ............................................................................................................... 5\n\n A. The Ground Lease Exhibits Almost All Of The Factors That Courts Have\n Relied On In Recharacterizing Leases .................................................................... 6\n\n B. The Ground Lease Contains Other Terms That Also Favor\n Recharacterization................................................................................................... 9\n\n C. The Original Complaint\u2019s Dismissal Does Not Implicate The Law Of The\n Case Doctrine ........................................................................................................ 12\n\n D. Defendant\u2019s Renewed \u201cQuasi-Estoppel\u201d Argument Is Baseless .......................... 14\n\n E. The Amended Complaint Complies With The Court\u2019s May 15 Requests ............ 16\n\n F. MSP\u2019s Analysis Of The Ground Lease\u2019s Terms Is Fundamentally Flawed .......... 17\n\nII. The Debtors Have Alleged Viable Claims to Avoid the Fourth Amendment as a\n Fraudulent Conveyance .................................................................................................... 18\n\nCONCLUSION ............................................................................................................................. 21\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 3 of 26\n\n\n\n\n TABLE OF AUTHORITIES\n\nCases\n\nAmgen Inc. v. Sanofi,\n 2019 WL 259099 (D. Del. Jan. 18, 2019) ................................................................................. 15\n\nAshcroft v. Iqbal,\n 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ............................................................. 5\n\nComer v. Am. Transmission Sys., Inc.,\n 2025 WL 1530750 (W.D. Pa. May 29, 2025) ........................................................................... 13\n\nConstr. Loan Servs. II LLC v. Silverrock Dev., Co., LLC (In re Silverrock Dev. Co., LLC),\n 2025 WL 3492145 (D. Del. Dec. 5, 2025) .................................................................................. 6\n\nFarmer v. Lanigan,\n 2016 WL 4107693 (D.N.J. Aug. 1, 2016) ................................................................................. 14\n\nFowler v. UPMC Shadyside,\n 578 F.3d 203 (3d Cir. 2009) ........................................................................................................ 5\n\nHotel Syracuse, Inc. v. City of Syracuse Indus. Dev. Agency,\n 155 B.R. 824 (Bankr. N.D.N.Y. 1993) .................................................................................. 7, 14\n\nIn re 48th St. Steakhouse, Inc.,\n 61 B.R. 182 (Bankr. S.D.N.Y. 1986)........................................................................................... 6\n\nIn re Anadrill Directional Servs. Inc.,\n 676 B.R. 860 (Bankr. S.D. Tex. 2026) ...................................................................................... 14\n\nIn re BYJU\u2019s Alpha, Inc.,\n 2025 WL 659092 (D. Del. Feb. 27, 2025) ................................................................................ 19\n\nIn re Charys Holding Co., Inc.,\n 443 B.R. 628 (Bankr. D. Del. 2010) ......................................................................................... 20\n\nIn re DBSI, Inc.,\n 445 B.R. 344 (Bankr. D. Del. 2011) ......................................................................................... 20\n\nIn re EBC I, Inc.,\n 356 B.R. 631 (Bankr. D. Del. 2006) ......................................................................................... 19\n\nIn re Green Field Energy Servs., Inc.,\n 2015 WL 5146161 (Bankr. D. Del. 2015)................................................................................. 20\n\nIn re Integrated Health Servs., Inc.,\n 260 B.R. 71 (Bankr. D. Del. 2001) ............................................................................................. 7\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 4 of 26\n\n\n\n\nIn re Modell\u2019s Sporting Goods, Inc.,\n 2023 WL 2961856 (Bankr. D.N.J. Apr. 14, 2023) .................................................................... 19\n\nIn re Montgomery Ward, LLC,\n 469 B.R. 522 (Bankr. D. Del. 2012) ....................................................................................... 6, 7\n\nIn re Olick,\n 565 B.R. 767 (Bankr. E.D. Pa. 2017) ........................................................................................ 13\n\nIn re PCH Assocs.,\n 804 F.2d 193 (2d Cir. 1986) ............................................................................................... passim\n\nIn re PennySaver USA Publ\u2019g, LLC,\n 602 B.R. 256 (Bankr. D. Del. 2019) ......................................................................................... 20\n\nIn re R.M.L., Inc.,\n 92 F.3d 139 (3d Cir. 1996) ........................................................................................................ 18\n\nIn re Wingspread Corp.,\n 116 B.R. 915 (Bankr. S.D.N.Y. 1990) ......................................................................................... 8\n\nIndustriens Pensionsforsikring A/S v. Becton, Dickinson & Co.,\n 620 F. Supp. 3d 167 (D.N.J. 2022) ........................................................................................... 14\n\nIngrao v. AddShoppers, Inc.,\n 2024 WL 4892514 (E.D. Pa. Nov. 25, 2024) .............................................................................. 5\n\nInt\u2019l Trade Admin. v. Rensselaer Polytechnic Inst.,\n 936 F.2d 744 (2d Cir. 1991) ............................................................................................... passim\n\nJ&R Passmore, LLC v. Rice Drilling D, LLC,\n 2024 WL 1347291 (S.D. Ohio Mar. 29, 2024) ......................................................................... 15\n\nLiona Corp., N.V. v. PCH Assocs. (In re PCH Assocs.),\n 949 F.2d 585 (2d Cir. 1991) ...................................................................................................... 17\n\nMOAC Mall Holdings LLC v. Transform Holdco LLC (In re Sears Holdings Corp.),\n 2024 WL 5113165 (2d Cir. Dec. 16, 2024)..................................................................... 9, 10, 17\n\nNCA Inv\u2019rs Liquidating Trust v. Berkowitz, Trager & Trager, LLC (In re Seaboard Hotel Mbr.\n Assocs., LLC),\n 2021 Bankr. LEXIS 1564 (Bankr. D. Del. June 10, 2021) ....................................................... 19\n\nNetwork Apps, LLC v. AT&T Mobility LLC,\n 778 F. Supp. 3d 610 (S.D.N.Y. 2025) ....................................................................................... 14\n\nSprint Commc'ns Co. L.P. v. Cequel Commc'ns, LLC,\n 2022 WL 609213 (D. Del. Jan. 27, 2022) ................................................................................. 15\n\n\n\n iii\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 5 of 26\n\n\n\n\nTatis v. Allied Interstate, LLC,\n 882 F.3d 422 (3d Cir. 2018) ........................................................................................................ 5\n\nTeleprompter of Erie, Inc. v. City of Erie,\n 567 F. Supp. 1277 (W.D. Pa. 1983) .......................................................................................... 15\n\nUnited States ex. rel. Petratos v. Genentech Inc.,\n 855 F.3d 481 (3d Cir. 2017) ...................................................................................................... 13\n\nStatutes\n\n11 U.S.C. \u00a7 548 ............................................................................................................................. 19\n\nRules\n\nFed.R.Civ.P. 15.............................................................................................................................. 12\n\nFed.R.Civ.P. 9................................................................................................................................ 19\n\nFederal Rule of Bankruptcy Procedure 7008 .................................................................................. 9\n\nFederal Rule of Bankruptcy Procedure 7012 .................................................................................. 9\n\nFederal Rule of Bankruptcy Procedure 7015 ................................................................................ 12\n\n\n\n\n iv\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 6 of 26\n\n\n\n\n The Debtors/Plaintiffs Hudson 1701/1706, LLC and Hudson 1702, LLC (together, the\n\n\u201cPlaintiffs\u201d or the \u201cDebtors\u201d) submit this memorandum of law in opposition to the motion (the\n\n\u201cMotion\u201d) (Adv. Pro. Dkt. Nos. 93-95) of Defendant 356W58 Ground Lessor LLC (the\n\n\u201cDefendant\u201d), an affiliate of MSP Capital Management, L.L.C., d/b/a Montgomery Street Partners\n\n(together with Defendant, \u201cMSP\u201d) to dismiss the Amended Complaint (the \u201cAmended\n\nComplaint\u201d or \u201cAm. Cmplt.\u201d) (Adv. Pro. Dkt. No. 91) in the above-captioned adversary\n\nproceeding (the \u201cAdversary Proceeding\u201d).\n\n PRELIMINARY STATEMENT\n\n The core issue in the Adversary Proceeding and in the Debtors\u2019 above-captioned chapter\n\n11 bankruptcy cases (the \u201cChapter 11 Cases\u201d) is how to treat the Debtors\u2019 contract with MSP, an\n\nagreement entitled \u201cGround Lease\u201d and dated May 4, 2022 (\u201cGround Lease\u201d) (Am. Cmplt., Ex.\n\nA). If, as the Debtors contend, the Ground Lease is not a true lease and should therefore be\n\nrecharacterized under established bankruptcy law, there is a compelling path to reorganization and\n\ncompletion of the Debtors\u2019 redevelopment project (the \u201cProject\u201d) at the former Hudson Hotel in\n\nNew York City (the \u201cProperty\u201d). If, as MSP contends, the Ground Lease is a true lease, the\n\nDebtors will be compelled to reject it, the Debtors will forfeit the Property, and MSP will take\n\npossession of it, inclusive of hundreds of millions of dollars of investment and improvements, and\n\nthere will be no reorganization for the benefit of the Debtors and their creditors.\n\n On May 15, 2026, this Court dismissed the Debtors\u2019 original complaint (\u201cOriginal\n\nComplaint\u201d) for recharacterization and other relief, without prejudice to repleading with\n\nadditional facts demonstrating that the Ground Lease is not a true lease. The Debtors responded\n\nby adding and clarifying numerous facts demonstrating that the transaction of which the Ground\n\nLease was a part \u2013 involving the acquisition of the Property for the Debtors\u2019 Project (the\n\n\n\n 1\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 7 of 26\n\n\n\n\n\u201cAcquisition Transaction\u201d) \u2013 reflects a relationship that is vastly different from an ordinary\n\nground lessor-ground lessee relationship. For example, unlike in a traditional ground lease:\n\n (1) the Ground Lease was executed as part of the Acquisition Transaction,\n which required the Debtors to pay almost $39 million (or almost 20%) of\n the Property\u2019s purchase price directly to the seller (Am. Cmplt. \u00b6 56);\n\n (2) the Ground Lease affirms, through an attached \u201cProject Budget,\u201d that its\n purpose was to provide financing for the Debtors\u2019 acquisition of the\n Property in connection with their Project to convert the Property into a\n multi-family apartment complex (id. \u00b6\u00b6 32-40, 58);\n\n (3) the Property \u2013 in conformance with MSP\u2019s own investment guidelines \u2013\n was purchased specifically for the Debtors\u2019 use in connection with the\n Project (id. \u00b6\u00b6 59-60);\n\n (4) the Ground Lease contains a \u201cRight-Size Payment\u201d provision which\n operates just like a common financial covenant in loan agreements that\n requires the maintenance of a defined ratio of income to debt service (a\n \u201cLoan Debt Service Covenant\u201d). Under this Right-Size Payment\n obligation, the Debtors owe an extraordinary $65 million payment in the\n tenth year of the Lease if net operating income for the Project does not meet\n unreasonably high thresholds, even if rents are timely paid (id. \u00b6\u00b6 66-67);\n\n (5) the Ground Lease expressly recognizes that this $65 million payment, and\n the $39 million in purchase price contributions, among other payments,\n cannot be treated as rent under the Internal Revenue Code (the \u201cIRC\u201d), and\n thus characterizes these amounts as loans from the Debtors to MSP (id. \u00b6\u00b6\n 71-75); and\n\n (6) the Right-Size Payment was designed to arise at a time when the Property\n would almost certainly not have the income to pay it, forcing a forfeiture of\n the Property and the $220 million of improvements on that Property, after\n only 1/10th of the 99-year term of the Ground Lease.\n\n(Am. Cmplt. \u00b6\u00b6 2-5, 54-75).\n\n Put another way, even though MSP contributed only 43 percent of the total financing for\n\nthe acquisition of the Property and development of the Project, through rejection or termination of\n\nthe Ground Lease, MSP would receive 100 percent of the value in the tenth year of a 99-year lease.\n\nMSP would take both the Property, with the Debtors\u2019 original $39 million purchase price\n\n\n\n\n 2\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 8 of 26\n\n\n\n\ncontribution, and the Project, in which approximately $220 million has been invested to date. For\n\nMSP, this would be an enormous and unprecedented windfall of at least $259 million. For all other\n\ncreditors in the Chapter 11 Cases, it would result in effectively no recovery whatsoever.\n\n In response to the Amended Complaint\u2019s expansion of details, MSP\u2019s opening\n\nmemorandum (\u201cDef. Br.\u201d) (Adv. Pro. Dkt. No. 94) all but ignores them and baselessly contends\n\nthat the Debtors have alleged nothing new. MSP does not directly address the newly articulated\n\nallegations in the Amended Complaint and, ultimately, merely contends (once again) that because\n\nthe parties called the Ground Lease a \u201clease,\u201d it must be a true lease under the Bankruptcy Code\n\n(see e.g., Def. Br. at 7, 21, 25).\n\n That, of course, is not the standard here \u2013 if it were, recharacterization would never be\n\ngranted in any case where an agreement is titled a \u201clease.\u201d As the Second Circuit Court of Appeals\n\nhas recognized, in recharacterization analyses, \u201c[t]he proper inquiry for a court . . . is whether \u2018the\n\nparties intended to impose obligations and confer rights significantly different from those arising\n\nfrom the ordinary landlord/tenant relationship.\u2019\u201d Int\u2019l Trade Admin. v. Rensselaer Polytechnic Inst.\n\n(\u201cRPI\u201d), 936 F.2d 744, 748 (2d Cir. 1991) (quoting In re PCH Assocs., 804 F.2d 193, 200 (2d Cir.\n\n1986) (\u201cPCH I\u201d)). Thus, the issue here is whether the following relationship can accurately be\n\ncharacterized as an \u201cordinary landlord/tenant relationship:\u201d\n\n The Debtors: (a) contributed almost $39 million toward the purchase price of the\n underlying Property, which was simultaneously leased by MSP to the Debtors for\n 99 years; (b) invested over $220 million in a redevelopment Project on that Property\n for the agreed-upon purpose of constructing and operating a multi-family\n residential building; but (c) now must forfeit the entire, improved Property back to\n MSP after less than 1/20 of the lease term, not because the Debtors have failed to\n pay rent but because construction delays impacted the Project\u2019s future cash flows\n and MSP is demanding, only three years after the anticipated Project completion\n date, a $65 million \u201cpay down\u201d of its investment in the Property \u2013 a demand that\n (i) acts just like enforcement of a loan debt service coverage ratio, (ii) the tenant\n cannot possibly pay or raise so soon after completion, and (iii) the Internal Revenue\n Code forbids the parties from treating as rent.\n\n\n\n 3\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 9 of 26\n\n\n\n\nIt is plausible, and in fact quite probable, that this relationship is not an \u201cordinary landlord/tenant\n\nrelationship.\u201d The Debtors\u2019 recharacterization claim is clearly plausible, the Motion should be\n\ndenied, and the parties should move forward to a trial for which they have already prepared. 2\n\n BACKGROUND\n\n I. Procedural History\n\n On December 22, 2025, the Debtors filed the Original Complaint. (Adv. Pro. Dkt. No. 1).\n\nMSP moved to dismiss the Original Complaint on February 4, 2026. (Adv. Pro. Dkt. No. 15).\n\n Because of the importance of the characterization of the Ground Lease to the resolution of\n\nthese Chapter 11 cases, the Debtors and MSP agreed to an expedited schedule for the adjudication\n\nof the Original Complaint. From February to May 2026, the parties engaged in discovery, which\n\nincluded the exchange of tens of thousands of pages of documents, the depositions of several fact\n\nwitnesses, and expert reports and related depositions. In light of these efforts, the parties are ready\n\nto proceed expeditiously to trial on the Amended Complaint.\n\n On May 15, 2026, in open court, the Court granted MSP\u2019s motion to dismiss the Original\n\nComplaint but provided the Debtors leave to amend their complaint to add and/or clarify the factual\n\nallegations in the complaint and the relief sought. The Debtors promptly filed their Amended\n\nComplaint on June 10, 2026. (Adv. Pro. Dkt. No. 91).\n\n\n\n\n2\n The Defendant is similarly wrong about the Debtors\u2019 repleaded causes of action for constructive\nfraudulent transfer with respect to the March 2024 Fourth Amendment to the Ground Lease (the\n\u201cFourth Amendment\u201d). The Debtors\u2019 new allegations supporting those claims sufficiently state\nplausible claims under both federal and state fraudulent transfer law. (Am. Cmplt.\u00b6\u00b6 83-87).\n\n\n\n 4\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 10 of 26\n\n\n\n\nII. The Amended Complaint\n\n The facts related to this Adversary Proceeding, and the Debtors\u2019 repleaded\n\nrecharacterization and fraudulent transfer claims, are set forth in robust detail in the Amended\n\nComplaint. 3\n\n LEGAL STANDARD\n\n \u201cTo survive dismissal, \u2018a complaint must contain sufficient factual matter, accepted as true,\n\nto \u2018state a claim to relief that is plausible on its face.\u2019\u201d Tatis v. Allied Interstate, LLC, 882 F.3d 422,\n\n426 (3d Cir. 2018) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). \u201cIn assessing the\n\nplausibility of a claim, the court must \u2018accept all factual allegations as true, construe the complaint\n\nin the light most favorable to the plaintiff, and determine whether, under any reasonable reading\n\nof the complaint, the plaintiff may be entitled to relief.\u2019\u201d Ingrao v. AddShoppers, Inc., 2024 WL\n\n4892514, at *5 (E.D. Pa. Nov. 25, 2024) (quoting Fowler v. UPMC Shadyside, 578 F.3d 203, 210\n\n(3d Cir. 2009)).\n\n ARGUMENT\n\n I. The Amended Complaint Sufficiently\n Alleges A Claim For Recharacterization Of The Ground Lease\n\n In adopting the relevant provisions of the Bankruptcy Code, Congress expressly recognized\n\nthat the Code\u2019s treatment of leases should apply only to \u201ctrue leases\u201d:\n\n Congress was not blind to the economic realities which have led to the use of a\n lease as a financing device or as collateral security. The legislative history to section\n 502 of the Code . . . makes clear the Congressional intention that the [section 365]\n limitation be applied to only true leases, with the determination that a lease is a true\n one to turn on the circumstances of each case and the economic substance of the\n transaction, not on the locus of title, form of transaction or the mere labelling as a\n lease. See 124 Cong. Rec. H. 11, 093\u201394 (Sept. 28, 1978); S 17, 410 (Oct. 6, 1978).\n\n\n\n3\n Capitalized terms used but not defined herein have the meanings ascribed to them in the Amended\nComplaint.\n\n\n 5\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 11 of 26\n\n\n\n\nIn re 48th St. Steakhouse, Inc., 61 B.R. 182, 190 (Bankr. S.D.N.Y. 1986), aff\u2019d, 77 B.R. 409\n\n(S.D.N.Y. 1987), aff\u2019d, 835 F.2d 427 (2d Cir. 1987).\n\n The touchstone for determining whether a lease is a \u201ctrue lease\u201d is the substance of the\n\nterms of the purported lease, rather than the label that the parties have affixed to the agreement in\n\nthe past. Constr. Loan Servs. II LLC v. Silverrock Dev., Co., LLC (In re Silverrock Dev. Co., LLC),\n\n2025 WL 3492145, at *3 (D. Del. Dec. 5, 2025) (\u201cTo determine whether it\u2019s a financing instrument\n\nor a true lease [the] court must look at the circumstances and economic substance of the agreement\n\nto discern the true nature of the instrument regardless of what [it] is called\u201d (citation omitted)); In\n\nre Montgomery Ward, LLC, 469 B.R. 522, 529 (Bankr. D. Del. 2012) (\u201c[T]he bankruptcy court is\n\nto look to the circumstances of the case and consider the economic substance of the transaction\n\nrather than \u2018the locus of the title, the form of the transaction or the fact that the transaction is\n\ndenominated as a \u2018lease,\u2019 to determine whether the transaction embodies a \u2018true lease\u2019 or a\n\nfinancing transaction\u2019\u201d) (quoting PCH I, 804 F.2d at 199)).\n\n MSP correctly notes that the Ground Lease is presumed to be a true lease, but that\n\npresumption is rebuttable, and courts have provided significant guidance on the factors relevant to\n\nthe rebuttal analysis. Here, the Ground Lease should be recharacterized because it both exhibits\n\nthe majority of factors that courts have identified as relevant to a recharacterization analysis and,\n\nas part of the Acquisition Transaction, reflects other unique aspects that demonstrate it established\n\nsomething other than an \u201cordinary landlord/tenant relationship.\u201d RPI, 936 F.2d at 748.\n\n A. The Ground Lease Exhibits Almost All Of The Factors\n That Courts Have Relied On In Recharacterizing Leases\n\n Of the several considerations that courts have looked to in determining whether to\n\nrecharacterize a lease, the Ground Lease exhibits almost all of them. These factors were discussed\n\nforty years ago by the Second Circuit in PCH I, where the court affirmed the foundational principle\n\n\n\n 6\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 12 of 26\n\n\n\n\nthat bankruptcy courts must \u201clook to the circumstances of the case and consider the economic\n\nsubstance of the transaction rather than the locus of the title, the form of the transaction or the fact\n\nthat the transaction is denominated as a lease, to determine whether the transaction embodies a\n\ntrue lease or a financing transaction.\u201d 804 F.2d at 199 (citation modified). The court then discussed\n\nseveral different recharacterization considerations that later courts have synthesized into a non-\n\nexclusive list of factors in determining whether a lease is a \u201ctrue lease,\u201d including:\n\n (1) whether the \u201crental\u201d payments were calculated to compensate the lessor for\n the use of the land, or rather were structured for some other purpose, such\n as to ensure a particular return on an investment;\n\n (2) whether the purchase price was related to the fair market value of the land,\n or whether it was calculated as the amount necessary to finance the\n transaction;\n\n (3) whether the property was purchased by the lessor specifically for the\n lessee\u2019s use;\n\n (4) whether the transaction was structured as a lease to secure certain tax\n advantages;\n\n (5) whether the lessee assumed many of the obligations normally associated\n with outright ownership, including the responsibility for paying property\n taxes and insurance;\n\n (6) whether the lease contains provisions which permit or require the lessee to\n purchase the premises for a nominal sum at the end of the lease term; and\n\n (7) an \u201cunusually long term\u201d for the lease.\n\n\nSee PCH I, 804 F.2d 200-01; In re Montgomery Ward, LLC, 469 B.R. 522, 530 (citing In re Dena\n\nCorp., 312 B.R. 162, 170 (Bankr. N.D. Ill. 2004)); In re Dena Corp., 312 B.R. at 170 (quoting\n\nHotel Syracuse, Inc. v. City of Syracuse Indus. Dev. Agency (In re Hotel Syracuse, Inc.) (Bankr.\n\nN.D.N.Y. 1993) (\u201dHotel Syracuse\u201d)); In re Integrated Health Servs., Inc., 260 B.R. 71, 76 (Bankr.\n\nD. Del. 2001) (citing PCH I, 804 F.2d at 200-01 and Hotel Syracuse, 155 B.R. at 838-839); Hotel\n\n\n\n 7\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 13 of 26\n\n\n\n\nSyracuse, 155 at 838\u2013839 (citing PCH I, 804 F.2d at 200-01); In re Wingspread Corp., 116 B.R.\n\n915, 923 (Bankr. S.D.N.Y. 1990) (citing PCH I , 804 F.2d at 200-01).\n\n The Amended Complaint sets forth in detail how the Ground Lease satisfies six out of these\n\nseven recharacterization factors:\n\n (1) the rent payments under the Ground Lease were based not on market rates,\n but rather to ensure specific investor yield targets (Am. Cmplt. \u00b6\u00b6 61-62);\n\n (2) the Ground Lease\u2019s \u201cProject Budget\u201d demonstrates that it was part of the\n acquisition and redevelopment financing for the Project (id. \u00b6\u00b6 32-40, 58);\n\n (3) the Property was purchased for the sole purpose of leasing it to the Debtors\n for redevelopment and operation by the Debtors, not MSP (id. \u00b6\u00b6 59-60);\n\n (4) MSP or its investors are advantageously allowed to avoid taxation on\n significant payments from the Debtors by characterizing them as \u201cloans\u201d\n from the Debtors, rather than as rent payments (id. \u00b6\u00b6 71-75);\n\n (5) the Debtors assumed all the obligations of ownership of the Property,\n including paying of all real estate taxes, obtaining insurance at levels\n demanded by the Ground Lessor, keeping and maintain the Property in good\n condition, repair, and appearance (id. \u00b6 78); and\n\n (6) the Ground Lease has an unusually long, 99-year term (id. \u00b6 77).\n\n Importantly, courts have recognized that these factors are additive, and are not viewed in\n\nisolation. For example, in RPI, the Second Circuit was presented with a \u201ctriple net\u201d lease, which\n\nobligated the lessee to pay property taxes, operating expenses, and similar costs associated with\n\nthe operation of the leased property. 936 F.2d at 750-51. The Second Circuit cautioned that the\n\n\u201cindicia of ownership\u201d associated with a \u201ctriple net\u201d lease \u201cshould not be viewed in isolation,\u201d due\n\nto \u201cthe increasingly common use of \u2018triple net\u2019 leases.\u201d Id. at 751. However, although that single\n\nfactor was not dispositive, the Second Circuit noted that it was a \u201cfactor in our decision\u201d combined\n\nwith the other factors weighing in favor of recharacterization. Id. In that same case, the Second\n\nCircuit also noted that while \u201can unusually long term, standing alone, does not automatically signal\n\n\n\n\n 8\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 14 of 26\n\n\n\n\nthat an agreement is not a true lease\u201d, \u201cin combination with other factors, it may lead to such a\n\nconclusion.\u201d Id. at 749.\n\n Considering these well-established factors together, the allegations of the Amended\n\nComplaint weigh heavily in favor of a recharacterization of the Ground Lease and, at the very\n\nleast, establish that a claim for recharacterization of the Ground Lease is \u201cplausible,\u201d thus\n\nsatisfying the pleading requirements of Rule 7008 of Federal Rule of Bankruptcy Procedure\n\n(\u201cBankruptcy Rule\u201d) and prohibiting dismissal of the Amended Complaint pursuant to\n\nBankruptcy Rule 7012(b). The only missing factor \u2013 a provision for the Debtors to purchase the\n\nunderlying Property \u2013 is not dispositive, as the Second Circuit has made clear in the cases discussed\n\nbelow.\n\n B. The Ground Lease Contains\n Other Terms That Also Favor Recharacterization\n\n Recharacterization is even more plausible here because of the other extraordinary non-\n\nlease terms in the Ground Lease. As this Court has recognized (Bankr. Dkt. No. 447 (4/21/2026\n\nTr.) at 146:19-147:5; Adv. Pro. Dkt. No. 90 (5/15/26 Tr.) at 4:18-25), cases recharacterizing leases\n\noften involve considerations beyond the factors discussed in PCH I and its progeny. For example,\n\nin MOAC Mall Holdings LLC v. Transform Holdco LLC (In re Sears Holdings Corp.), 2024 WL\n\n5113165, at *3 (2d Cir. Dec. 16, 2024), the Second Circuit focused on the fact that the debtor-\n\ntenant had prepaid 30 years of rent on a 100-year lease for a shopping mall. And, although that\n\nrent amounted to only $300 ($10 a year for 30 years), the Court held that allowing a lessor to\n\n\u201crecapture\u201d a leased premises decades before the termination of the lease would be a \u201cgrossly\n\ninequitable\u201d windfall that supported recharacterization. 2024 WL 5113165, at *3 (to permit MOAC\n\n\u201cto recapture the leased premises over sixty years before the expiration of the MOAC Lease would\n\namount to a windfall to MOAC . . . . That a present reversion to [MOAC] would be grossly\n\n\n\n 9\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 15 of 26\n\n\n\n\ninequitable bolsters our conclusion that \u00a7 365(d)(4) does not apply to this unusual transaction\u201d\n\n(citation modified)). Similarly, in RPI, the Second Circuit found that $97,830 in prepaid rent, when\n\nconsidered with a 99-year lease term and significant improvements, was not \u201cthe kind of agreement\n\nCongress envisioned as being subject to \u00a7 365(d)(4).\u201d 936 F.2d at 750.\n\n Both of these Second Circuit decisions affirmed lease recharacterizations even where, as\n\nhere, there was no provision permitting the tenant to purchase the leased property at any point in\n\ntime. 4 The underlying focus of both MOAC and RPI was not some future opportunity to purchase\n\nthe property by the tenant-debtor, but rather the life span of the intended use of the property, the\n\ngrossly premature forfeiture of that property, and any improvements made to the property by the\n\ntenant-debtor.\n\n Such concerns exist here as well and in greater magnitude: as noted, the Debtors paid\n\nalmost $39 million toward the purchase of the Property (or almost 20% of the purchase price) and\n\nhave spent approximately $220 million on construction and other costs related to the completion\n\nof the Project. Yet, all of this Debtor-created value would be lost by the tenth year (or, pursuant to\n\nthe Chapter 11 Cases, by as little as the fifth year) of a 99-year lease if the Ground Lease is\n\ndetermined to be a true lease. (Am. Cmplt. \u00b6\u00b6 4-7) The Second Circuit faced a very similar issue\n\nin RPI:\n\n To permit [RPI] to recapture the leased premises with the manufacturing facility\n improvements would amount to a \u201cwindfall\u201d to RPI. RPI might argue that there is\n no \u201cwindfall\u201d since the property, including the manufacturing facility, reverts to it\n in 2082 at the end of the 99 year term. However, the windfall is the current value\n today of the premises improved by a relatively new manufacturing facility, less the\n \u201cpresent value\u201d in economic terms of a reverter of the premises in an unknown state\n of improvement in 91 years. That a present reversion to RPI would be grossly\n inequitable bolsters our conclusion that \u00a7 365(d)(4) does not apply to this unusual\n transaction.\n\n\n4\n Although the existence of such a term is not discussed in MOAC, it is highly unlikely that a\nshopping mall tenant would ever have a right to purchase the fee underlying its leased store space.\n\n\n 10\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 16 of 26\n\n\n\n\n936 F.2d at 751. As in RPI, MSP should not be allowed a windfall, which in this case would be at\n\nleast $259 million.\n\n The Amended Complaint also details the loan-like requirements of the Right Size Payment.\n\n(Am. Cmplt. \u00b6\u00b6 63-70). Traditional leases involve the payment of agreed-upon rents and costs\n\nassociated with the maintenance and upkeep of the underlying property. The Right-Size Payment\n\nis something very different and operates like a loan debt service coverage ratio. Such a covenant\n\nrequires a paydown of a loan when income drops as a ratio to required debt service. The Right-\n\nSize Payment arises in the exact same circumstances: where, as here, the Debtors experience\n\ndifficulty in completing construction and timely generating a benchmarked net operating income\n\nfrom the Property, the Debtors are compelled to transfer to MSP tens of millions of dollars to \u201cpay\n\ndown\u201d MSP\u2019s investment in the property. This Right Size Payment punishes the Debtors even if\n\nthe Debtors are timely paying rent in full. (Am. Cmplt. \u00b6 66). Because of the draconian terms that\n\nMSP demanded from the Debtors in the Fourth Amendment, that penalty payment now stands at\n\n$65 million in 2032 (Am. Cmplt. \u00b6\u00b6 4-5, 46-50, 67-70), a sum the Debtors cannot possibly pay or\n\nfinance.\n\n Proof that the Right-Size Payment is not a traditional lease term can be found in the express\n\nterms of the Ground Lease. Four times in the Ground Lease and its amendments, extraordinary\n\ntenant payment obligations are referred to as \u201cprepaid\u201d or \u201cadditional\u201d rent, but MSP ultimately\n\ntreats them as loans because the IRC precludes rent treatment:\n\n (1) the Debtors\u2019 $36.85 million contribution to the purchase of Units 1701 and\n 1702 (Ground Lease, \u00a7 5(d));\n\n (2) the Debtors\u2019 $2 million contribution to the purchase of Unit 1706 (Ground\n Lease, \u00a7 47(e));\n\n (3) the Right-Size Payment (Ground Lease, \u00a7 60(d)); and\n\n\n\n 11\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 17 of 26\n\n\n\n\n (4) any buy back of rent under the Fourth Amendment (Fourth Amendment,\n \u00a77(e)).\n\n(Am. Cmplt. \u00b6\u00b6 71-75).\n\n As MSP concedes, IRC \u00a7 467 forbids the treatment of these payments as rent and, therefore,\n\nthe Ground Lease contains language identical or similar to the following for all four of these\n\nextraordinary payments: \u201c[f]or all U.S. federal, state and local tax purposes, Landlord and Tenant\n\nshall treat the Prepaid Rent as a prepayment of Additional Rent that is treated as a loan pursuant\n\nto Section 467 of the Code.\u201d (Am. Cmplt. \u00b6 73). Two of the extraordinary payments have already\n\nbeen paid: the Debtors\u2019 contribution to the purchase of Units 1701 and 1702 and the Debtors\u2019\n\ncontribution to the purchase of Unit 1706. MSP concedes that it has not repaid any of these \u201cloans\u201d\n\nto the Debtors or credited any of these payments against rent. (Id. \u00b6 74).\n\n C. The Original Complaint\u2019s Dismissal Does\n Not Implicate The Law Of The Case Doctrine\n\n MSP also argues that the Court should dismiss the Amended Complaint because its order\n\ndismissing the Original Complaint is now law of the case and cannot be revisited. (Def. Br. at 26-\n\n28). Of course, this contention \u2013 which identifies no specific legal ruling by the Court other than\n\nthe dismissal itself \u2013 ignores the fact that the dismissal was without prejudice to the Debtors\n\namending with additional allegations. (See Adv. Pro. Dkt. No. 90 (5/15/26 Tr.) at 8:11-14). If MSP\n\nwere right \u2013 and law of the case applied even where leave to amend is granted \u2013 Bankruptcy Rule\n\n7015\u2019s provision permitting parties to amend with leave of Court would be effectively written out\n\nof the Bankruptcy Rules.\n\n Tellingly, none of MSP\u2019s cases involve the procedural posture of this current case, i.e., a\n\nmotion to dismiss an amended complaint following dismissal of the original complaint with leave\n\n\n\n\n 12\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 18 of 26\n\n\n\n\nto amend. 5 (Def. Br. at 27). Instead, courts routinely find that a prior ruling on a motion to dismiss\n\ndoes not implicate law of the case when the issue is whether an amended complaint has plausibly\n\nstated a claim. See, e.g., Comer v. Am. Transmission Sys., Inc., 2025 WL 1530750, at *10 n.14\n\n(W.D. Pa. May 29, 2025) (\u201cIn this matter, in which the Court previously dismissed all claims,\n\nincluding the claim against [defendant] without prejudice to amendment, the law of the case does\n\nnot bar the Court's consideration of whether Plaintiff has, in his FAC, stated a plausible claim\n\nagainst [defendant]\u201d (emphasis in original)); United States ex. rel. Petratos v. Genentech Inc., 855\n\nF.3d 481, 493 (3d Cir. 2017) (\u201cTherefore, interlocutory orders . . . remain open to trial court\n\nreconsideration, and do not constitute the law of the case. And the grant of a leave to amend is an\n\ninterlocutory order\u201d (citation modified)); In re Olick, 565 B.R. 767, 792 n.38 (Bankr. E.D. Pa.\n\n2017) (noting law of the case doctrine \u201cis not employed when the earlier decision was in the\n\ncontext of a motion to dismiss\u201d), aff\u2019d, 829 F. App'x 586 (3d Cir. 2020).\n\n This rule is especially true where, as here, a plaintiff has pled additional facts not previously\n\nconsidered:\n\n [I]t does not follow that the law of the case doctrine controls this motion to dismiss.\n The reason for this conclusion is clear \u2013 the \u201claw of the case\u201d on which Plaintiff\n seeks to rely is this Court's screening of Plaintiff's original complaint. Plaintiff's\n filing of an amended complaint, in which he pled facts which are not identical to\n those in his original complaint, changed the factual allegations which are before\n this Court. Thus, this case fits the exception to the law of the case doctrine where\n that doctrine is inapplicable \u2013 where the facts of the case have essentially changed\n and the law as it applies to the facts as they now stand must be re-evaluated.\n\n\n\n\n5\n The cases cited by MSP, Christianson v. Colt Indus. Operating Corp. 486 U.S. 800 (1988);\nHamilton v. Leavy, 322 F.3d 776 (3d Cir. 2003); In re Cont'l Airlines, Inc., 279 F.3d 226, 228 (3d\nCir. 2002); In re City of Philadelphia Litig. 158 F.3d 711 (3d Cir. 1998); and Pub. Int. Rsch. Grp.\nof New Jersey, Inc. v. Magnesium Elektron, Inc., 123 F.3d 111 (3d Cir. 1997), all considered\nwhether prior appellate court decisions in those same litigations were law of the case in subsequent\nproceedings. Procedurally, all of these cases were either post-transfer, post-plan confirmation,\npost-summary judgment or post-trial.\n\n\n 13\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 19 of 26\n\n\n\n\nFarmer v. Lanigan, 2016 WL 4107693, at *3 (D.N.J. Aug. 1, 2016); see also Network Apps, LLC\n\nv. AT&T Mobility LLC, 778 F. Supp. 3d 610, 619\u201320 (S.D.N.Y. 2025) (\u201cBy contrast, to the extent\n\nthat a plaintiff has offered new claims or factual allegations that arguably address the deficiencies\n\nthe Court previously identified, the Court will consider those claims anew.\u201d (citation modified));\n\nIndustriens Pensionsforsikring A/S v. Becton, Dickinson & Co., 620 F. Supp. 3d 167, 185 n.14\n\n(D.N.J. 2022) (\u201cIn the case of a motion to dismiss, the law of the case doctrine does not apply\n\nwhere, as here, new allegations have been made which change the nature of the record and place\n\nit in an altogether different state than it was in at the time the Court decided the issue at hand\u201d).\n\n D. Defendant\u2019s Renewed \u201cQuasi-Estoppel\u201d Argument Is Baseless\n\n In addition, MSP once again contends that the Debtors are \u201cestopped\u201d from bringing a\n\nrecharacterization claim because they have referred to the Ground Lease as a \u201clease\u201d in the past.\n\n(Def. Br. at 22-23). This contention is still meritless for several reasons.\n\n First, the issue here is whether the Ground Lease is a \u201ctrue lease,\u201d not whether it is called\n\na lease. As this Court recognized during argument on MSP\u2019s original motion (Bankr. Dkt. No. 447\n\n(4/21/2026 Tr.) at 122:22-123:7, 128:9-15), recharacterization analysis focuses on the economic\n\nsubstance of the Ground Lease and not how it is labeled. See also PCH I, 804 F.2d at 199\n\n(\u201cFurthermore, the bankruptcy court is to look to the circumstances of the case and consider the\n\neconomic substance of the transaction rather than \u2018the locus of title, the form of the transaction or\n\nthe fact that the transaction is denominated as a \u201clease\u201d\u2019 to determine whether the transaction\n\nembodies a \u2018true lease\u2019 or a financing transaction.\u201d (quoting S. Rep. No. 989, 95th Cong., 2d Sess.\n\n64)); In re Anadrill Directional Servs. Inc., 676 B.R. 860, 869 (Bankr. S.D. Tex. 2026) (noting that\n\nwhen applying New York law in a recharacterization analysis \u201ccourts look to the substance, not\n\nmerely the form of an agreement.\u201d); Montgomery Ward, 469 B.R. at 528 (\u201cSimply labeling an\n\nagreement a \u2018lease\u2019 does not necessarily create a true lease.\u201d); Hotel Syracuse, 155 B.R. at 838\n\n\n 14\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 20 of 26\n\n\n\n\n(\u201cIn making this determination a court is not constrained by the labels placed upon the transaction\n\nby the parties. Rather, the court must look to the economic substance of the transaction to\n\ndetermine whether it is in fact a \u2018true\u2019 lease\u201d). Accordingly, the fact that a lease was called a lease\n\ndoes not, as MSP would have, resolve the issue of whether it is a \u201ctrue lease.\u201d\n\n Second, as the Defendant\u2019s own case law states, \u201c[t]he doctrine [of quasi-estoppel] only\n\napplies when the earlier position amounts to a misstatement of fact, not of law . . . .\u201d Amgen Inc.\n\nv. Sanofi, 2019 WL 259099, at *4 (D. Del. Jan. 18, 2019) (citations omitted). Whether the Ground\n\nLease is a true lease is a matter of contract construction and thus a legal, not factual, issue. (See\n\nsupra pp. 5-9). Tellingly, none of the authority that the Defendant cites in its brief addresses quasi-\n\nestoppel in the context of a recharacterization claim.\n\n Third, the Defendant\u2019s entire quasi-estoppel argument rests on the circular contention that\n\nsince the Debtors called the Ground Lease a lease, the Debtors \u201cbenefit[ed]\u201d from a lease, and\n\ncannot now challenge that lease. (See, e.g., Def. Br. at 25 (\u201c[G]iven that Parkview and Debtors\n\naccepted the benefits of the Lease, they are estopped from now taking an inconsistent position with\n\nthe Lease and the numerous agreements based upon the Lease\u2019s validity to avoid the obligations\n\nor effects under the Lease.\u201d)). However, the Debtors dealt with the Ground Lease based on its\n\neconomic substance, which is not that of a true lease. Once again, the critical issue here is economic\n\nsubstance, and the consideration of economic substance requires a trial on the Debtors\u2019 claims. 6\n\n\n\n6\n In any event, quasi-estoppel is an equitable doctrine turning on factual issues of context and\nfairness. See, e.g., Teleprompter of Erie, Inc. v. City of Erie, 567 F. Supp. 1277, 1282 (W.D. Pa.\n1983) (\u201c[Q]uasi-estoppel . . . is regarded as a species of equitable estoppel.\u201d). The Defendant\u2019s\ntheory here depends on disputed inferences about \u201cbenefits\u201d \u201cinconsistencies,\u201d and\n\u201cunconscionability\u201d (Def. Br. at 22) that cannot be resolved against Debtors on a motion to dismiss.\nSee J&R Passmore, LLC v. Rice Drilling D, LLC, 2024 WL 1347291, at *15 (S.D. Ohio Mar. 29,\n2024) (denying summary disposition where quasi-estoppel required \u201ctoo fact-intensive of an\ninquiry\u201d); Sprint Commc\u2019ns Co. L.P. v. Cequel Commc\u2019ns, LLC, 2022 WL 609213, at *2 (D. Del.\nJan. 27, 2022) (\u201cEquitable estoppel is a fact-intensive inquiry.\u201d).\n\n\n 15\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 21 of 26\n\n\n\n\n E. The Amended Complaint Complies With The Court\u2019s May 15 Requests\n\n During the May 15, 2026 hearing, the Court requested that, if the Debtors chose to amend\n\ntheir complaint, they include additional recharacterization allegations and \u201call forms of relief that\n\nyou seek and require with respect to the ground lease, in order to move the Chapter 11 cases\n\nforward, including any counts to determine the validity, priority, or extent of any purported liens\n\nof the ground lessor under Rule 7001(b), and whether Parkview should be added as a necessary\n\nparty is also an issues [sic] that needs to be considered\u201d (Adv. Pro. Dkt. No. 95 (5/15/26 Tr.) at\n\n9:8-14). The Debtors have done just that with the extensive allegations set forth in the Amended\n\nComplaint.\n\n Nonetheless, MSP contends that the Debtors \u201cdid not follow the Court\u2019s instruction to\n\nassert what the Lease is if not a true lease, or name Parkview as a necessary party.\u201d (Def. Br. at\n\n18). This statement is demonstrably false: the vast majority of the Amended Complaint\u2019s\n\nparagraphs address the fact that the Ground Lease is not a true lease (see, e.g., Am. Cmplt. \u00b6\u00b6 1-10,\n\n21-82), and no less than ten paragraphs address the relief that the Debtors seek (id., \u00b6\u00b6 88-97).\n\n Furthermore, the Court did not expressly direct the Debtors to add Parkview as a party to this\n\nadversary proceeding, and the existing case law on recharacterization demonstrates that such a\n\njoinder is unnecessary. As the Second Circuit recognized in PCH I, in a recharacterization action\n\nlike this one, the initial issue under section 365 of the Bankruptcy Code is whether the lease is a\n\n\u201ctrue\u201d or \u201cbona fide\u201d lease:\n\n We interpret section 365(d)(3), (4) of the Bankruptcy Code to apply solely to a\n \u201ctrue\u201d or \u201cbona fide\u201d lease. The Ground Lease is not, in our opinion, a true lease as\n contemplated therein, and we find that determination dispositive of the case. It is\n unnecessary, therefore, to identify the transaction as a joint venture, security\n agreement, subordinated financing, or other investment scheme. Suffice it to say\n that it is not a bona fide lease for purposes of the Bankruptcy Code.\n\n\n\n\n 16\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 22 of 26\n\n\n\n\n804 F.2d at 198-99. In PCH I, the court determined that the disputed lease was not subject to\n\nsection 365 of the Bankruptcy Code, and then determined, in later proceedings, how the lease\n\nwould be treated. See Liona Corp., N.V. v. PCH Assocs., 949 F.2d 585 (2d Cir. 1991). The Amended\n\nComplaint requests that exact process. (Am. Cmplt. \u00b6\u00b6 88-97).\n\n F. MSP\u2019s Analysis Of The Ground Lease\u2019s Terms Is Fundamentally Flawed\n\n Finally, MSP contends that the Ground Lease reflects an ordinary landlord\u2013tenant\n\nrelationship by citing only a few of its terms and ignoring the factors discussed above. (Def. Br. at\n\n23). However, even when the terms that MSP relies upon are considered, they do not support its\n\ncontention that the Ground Lease is just an ordinary lease transaction.\n\n First, MSP relies on the fact that there is no provision for the Debtors to purchase the\n\nProperty at the end of the lease term, but both MOAC and RPI make clear that the absence of such\n\na contract term is insignificant where, like here, the application of section 365 would result in an\n\ninequitable forfeiture of debtor assets. (See supra pp. 8-11). Next, MSP relies on its \u201cabsolute and\n\nunconditional right\u201d to sell its interest in the Property (Def. Br. at 23), but as the Amended\n\nComplaint explains, no such absolute right exists in Section 11 of the Ground Lease. (Am. Cmplt.\n\n\u00b6 81). Moreover, even assuming Section 11 permits MSP to sell the Condominium Units subject\n\nto the Ground Lease, a change in ownership does not transform a disguised financing arrangement\n\ninto a true lease. Also, if MSP\u2019s interest is as a lender, the right to sell or assign that interest is a\n\nvery common right of a lender. MSP also relies on the fact that the Debtors are restricted in their\n\nright to use or transfer their leasehold interest, and that MSP has a priority interest with respect to\n\nthe Property, but similar provisions are common in loan agreements, as evidenced by the Parkview\n\nloan agreements accompanying MSP\u2019s Motion. (See, e.g., Adv. Pro. Dkt. No. 95 (McGuire 5/5/26\n\nDecl.) Exh. E (Building Loan Agreement, dated May 4, 2022), \u00a7\u00a7 8.2-8.7 (required construction\n\n\n\n\n 17\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 23 of 26\n\n\n\n\nactivities), 8.13 (requirements for changes to project costs), 8.21 (limitations on transfers), 8.23\n\n(limitations on assignments); Exh. G (Building Loan Leasehold Mortgage, Security Agreement,\n\nAssignment of Leases and Rents and Fixture Filing, dated May 4, 2022)). Finally, MSP relies on\n\nthe fact that the Debtors must maintain the Property, and that MSP can, with reasonable notice,\n\nvisit the Property (Def. Br. at 23), but once again, such terms are common in real estate loan\n\ntransactions (see, e.g., Adv. Pro. Dkt. No. 95 (McGuire 5/15/26 Decl.) Exh. E, \u00a7\u00a7 8.6 (compliance\n\nwith laws, permitting requirements), 8.10(a) (right of lender to enter and inspect property), 8.22\n\n(payment of taxes and other liabilities)).\n\n Of course, MSP makes no mention of the decidedly non-lease aspects of the Ground Lease\n\nthat do not fit within their self-serving presentation, including the Debtors\u2019 significant contribution\n\nto the purchase price of the Property, the fact that rent is based on investor-expected yields and not\n\nmarket rental rates, the simultaneous purchase and leasing of the Property, the Project Budget that\n\nreflects MSP\u2019s participation in the Project\u2019s capital stack, the original Right Size Payment, the\n\namended Right-Size Payment in the Fourth Amendment, and the fact that the Right Size Payments\n\nprovisions act much like a paydown of debt under a loan debt service coverage covenant.\n\n Recharacterization is a plausible outcome here (indeed, much more than plausible) based\n\non the well-pled allegations of the Amended Complaint, and MSP\u2019s motion to dismiss the Debtors\u2019\n\nrecharacterization claims in this Adversary Proceeding should be denied.\n\nII. The Debtors Have Alleged Viable Claims to Avoid\n the Fourth Amendment as a Fraudulent Conveyance\n\n Finally, MSP also contends that the Debtors\u2019 fraudulent transfer claims (Cmplt. \u00b6\u00b6 102-118\n\n(Counts II through V)) should be dismissed but relies almost exclusively on its contention that the\n\nFourth Amendment was agreed to and thus must be enforced. (Def. Br. at 28-29). The Bankruptcy\n\nCode provides to the contrary: section 548 expressly contemplates that a transaction subject to\n\n\n\n 18\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 24 of 26\n\n\n\n\nfraudulent transfer may have been \u201cvoluntarily\u201d made by the debtor. 11 U.S.C. \u00a7 548 (a)(1). See\n\nalso In re R.M.L., Inc., 92 F.3d 139, 148 (3d Cir. 1996) (concluding that non-refundable fees paid\n\npursuant to commitment letter were nonetheless avoidable as fraudulent conveyances because they\n\ndid not convey reasonably equivalent value to the debtor); In re BYJU\u2019s Alpha, Inc., 2025 WL\n\n659092, at *14 (Bankr. D. Del. Feb. 27, 2025) (\u201cAny otherwise legal transfer may be avoided\n\nunder \u00a7 548 if the requirements of that section are otherwise met\u201d) (citation omitted); In re EBC I,\n\nInc., 356 B.R. 631, 640-641 (Bankr. D. Del. 2006) (\u201c[F]raudulent conveyance statutes are intended\n\nto prevent an insolvent or undercapitalized debtor\u2019s estate and its creditors from being wrongfully\n\ndeprived of assets which could be otherwise utilized for the payment of creditors,\u201d and that \u201c[a]\n\ntransfer may be fraudulent even if it is made in accordance with the terms of a contract between\n\nthe parties\u201d (citation omitted)).\n\n Although MSP raises the specter of \u201cparticularity\u201d with respect to these fraudulent transfer\n\nclaims (Def. Br. at 29-30), the more recent case law in this Circuit holds that the particularity\n\nrequirements of Federal Rule of Civil Procedure 9(b), made applicable in the Adversary\n\nProceeding by Bankruptcy Rule 7009, do not apply to constructive fraudulent transfer claims like\n\nthose asserted here. See, e.g., In re Modell\u2019s Sporting Goods, Inc., 2023WL 2961856, at *23\n\n(Bankr. D.N.J. Apr. 14, 2023) (\u201cRule 9(b) may apply to certain claims brought under \u00a7 548 of the\n\nBankruptcy Code. However, . . . when the claim is constructive fraud, the great majority of cases\n\nhold that since a cause of action based on constructive fraud does not require proof of fraud, the\n\nheightened pleading requirements of Rule 9(b) are not applicable.\u201d) (quotation omitted); NCA\n\nInv\u2019rs Liquidating Trust v. Berkowitz, Trager & Trager, LLC (In re Seaboard Hotel Mbr. Assocs.,\n\nLLC), 2021 Bankr. LEXIS 1564, at *48 (Bankr. D. Del. June 10, 2021) (\u201cA plaintiff pleading\n\nconstructive fraud, as opposed to actual fraud, does not need to meet the heightened standard of\n\n\n\n\n 19\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 25 of 26\n\n\n\n\nRule 9(b). Constructive fraud is just that\u2014a statutory construct\u2014which in no way depends upon\n\nany fraudulent conduct by a defendant.\u201d). And, even if the particularity standard did apply here,\n\nMSP fails to identify what particulars are missing from the Amended Complaint.\n\n The Debtors have adequately pled the necessary statutory requirements for fraudulent\n\nconveyance. Insolvency is adequately pled: the Debtors allege that the Fourth Amendment was\n\nexecuted at a time when they were insolvent and provide specific numbers demonstrating that the\n\nDebtors\u2019 liabilities exceeded their assets. (Am. Cmplt. \u00b6\u00b6 51-53). In any event, \u201cinsolvency is best\n\nleft to discovery to determine and should not generally be decided on a motion to dismiss.\u201d In re\n\nPennySaver USA Publ\u2019g, LLC, 602 B.R. 256, 270 (Bankr. D. Del. 2019). \u201cThis is because the\n\ndetermination of insolvency is highly fact-specific and should be based on reasonable appraisals\n\nor expert testimony.\u201d Id. (citation omitted); see also In re DBSI, Inc., 445 B.R. 344, 349 (Bankr.\n\nD. Del. 2011) (\u201c[I]nsolvency is generally a factual determination not appropriate for resolution in\n\na motion to dismiss.\u201d).\n\n The Debtors have also pleaded specific provisions of the Fourth Amendment that\n\ntransferred value to MSP without the Debtors receiving reasonably equivalent value in return\n\n(Cmplt. \u00b6\u00b6 46-50), and MSP fails to demonstrate otherwise. Further, like insolvency, reasonably\n\nequivalent value is not properly determined on a motion to dismiss. See PennySaver, 602 B.R. at\n\n267 (\u201cReasonably equivalent value and insolvency are generally factual determinations that should\n\nbe reserved for discovery.\u201d); In re Green Field Energy Servs., Inc., 2015 WL 5146161, at *8\n\n(Bankr. D. Del. 2015) (\u201cGiven the wide number of variables to consider, and the less stringent\n\npleading requirements of Rule 8(a)(2) to constructive fraud claims, \u2018[t]he issue of \u201creasonably\n\nequivalent value\u201d requires a factual determination that cannot be made on a motion to dismiss.\u2019\u201d\n\n\n\n\n 20\n\f Case 25-52471-KBO Doc 97 Filed 07/30/26 Page 26 of 26\n\n\n\n\n(citation omitted)); In re Charys Holding Co., Inc., 443 B.R. 628, 638 (Bankr. D. Del. 2010)\n\n(same).\n\n The Debtors\u2019 fraudulent transfer claims are viable and plausible, and the Motion should be\n\ndenied as to these claims as well.\n\n CONCLUSION\n\n For all the reasons set forth above, the Motion should be denied in its entirety.\n\n DATED: Wilmington, Delaware CHIPMAN BROWN CICERO & COLE, LLP\n July 30, 2026\n\n /s/ William E. Chipman\n William E. Chipman, Jr. (No. 3818)\n Mark D. Olivere (No. 4291)\n Aaron J. Bach (No. 7364)\n Alison R. Maser (No. 7430)\n Hercules Plaza\n 1313 North Market Street, Suite 5400\n Wilmington, Delaware 19801\n Telephone: (302) 295-0191\n Email: chipman@chipmanbrown.com\n olivere@chipmanbrown.com\n bach@chipmanbrown.com\n maser@chipmanbrown.com\n\n Counsel for Debtors and Debtors in Possession\n\n\n BOIES SCHILLER FLEXNER LLP\n Robert D. Gordon\n Michael M. Fay\n Jenny H. Kim\n Sabina Mariella\n 55 Hudson Yards\n New York, New York 10001\n Telephone: (212) 446-2300\n Email: rgordon@bsfllp.com\n mfay@bsfllp.com\n jkim@bsfllp.com\n smariella@bsfllp.com\n\n Counsel for Debtors and Debtors in Possession\n\n\n 21\n\f","ocr_status":2,"date_upload":"2026-09-04T09:21:11.610334-07:00","document_number":"97","attachment_number":null,"pacer_doc_id":"042023114263","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Response","acms_document_guid":""}],"date_created":"2026-07-30T12:33:15.633446-07:00","date_modified":"2026-09-04T06:50:32.605310-07:00","date_filed":"2026-07-30","time_filed":"15:04:06","entry_number":97,"recap_sequence_number":"2026-07-30.001","pacer_sequence_number":338,"description":"Response // The Debtors' Opposition to the Defendant's Motion to Dismiss the Amended Complaint (related document(s)93, 94, 95) Filed by Hudson 1701/1706, LLC (Chipman, William) (Entered: 07/30/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/470354383/","id":470354383,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/485729360/","id":485729360,"tags":[],"absolute_url":"/docket/72070200/96/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-07-09T22:04:40.088167-07:00","date_modified":"2026-07-09T22:04:40.110011-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"96","attachment_number":null,"pacer_doc_id":"042023078617","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Certificate of Mailing","acms_document_guid":""}],"date_created":"2026-07-09T22:04:40.056784-07:00","date_modified":"2026-09-04T06:50:32.589488-07:00","date_filed":"2026-07-10","time_filed":"00:31:50","entry_number":96,"recap_sequence_number":"2026-07-10.001","pacer_sequence_number":331,"description":"Certificate of Mailing . Filed by 356W58 Ground Lessor LLC. (related document(s)93, 94, 95) (Matthews, Gene) (Entered: 07/10/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/470337295/","id":470337295,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/72070200/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/485711078/","id":485711078,"tags":[],"absolute_url":"/docket/72070200/93/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-07-09T16:32:43.304647-07:00","date_modified":"2026-09-10T17:45:09.320728-07:00","sha1":"f2994455d4f01b27766207bd696e1161c08a6657","page_count":2,"file_size":161443,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.93.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.93.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 25-52471-KBO Doc 93 Filed 07/09/26 Page 1 of 2\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\n\n\nIn re: Chapter 11\n\nHudson 1701/1706 LLC, Case No. 25-11853 (KBO)\n\n Debtors. 1 (Jointly Administered)\n\n\nHUDSON 1701/1706, LLC, a Delaware limited Adv. Proc. No. 25-52471 (KBO)\nliability company; and HUDSON 1702, LLC, a\nDelaware limited liability company,\n\n Plaintiffs,\n\n v.\n\n356W58 GROUND LESSOR LLC, a Delaware\nlimited liability company,\n\n Defendant.\n\n\n 356W58 GROUND LESSOR LLC\u2019S MOTION\n TO DISMISS THE AMENDED COMPLAINT\n\n 356W58 Ground Lessor LLC (\u201cLandlord\u201d), by and through its undersigned counsel, and\n\npursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, made applicable to this\n\nadversary proceeding pursuant to Rule 7012 of the Federal Rules of Bankruptcy Procedure, hereby\n\nsubmits this motion to dismiss the Amended Complaint (\u201cMotion\u201d) filed by Debtors. 2\n\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 headquarters and the\nmailing address for the Debtors is 11440 San Vicente Boulevard, 2nd Floor, Los Angeles, CA 90045.\n2\n Pursuant to Del. Bankr. L.R. 7012-1, Landlord consents to the entry of a final order or judgment solely as it relates\nto the relief sought in this Motion to the extent the Court, absent consent of the parties, cannot enter final orders or\njudgment consistent with Article III of the United States Constitution.\n\f Case 25-52471-KBO Doc 93 Filed 07/09/26 Page 2 of 2\n\n\n\n\n WHEREFORE, Landlord respectfully requests that the Court (i) enter the Proposed\n\nOrder, dismissing the Amended Complaint in its entirety, and (ii) grant such other and further relief\n\nas is just and proper.\n\n Dated: July 9, 2026 LANDIS RATH & COBB LLP\n Wilmington, Delaware\n /s/ Matthew B. McGuire\n Adam G. Landis (No. 3407)\n Matthew B. McGuire (No. 4366)\n Katherine S. Dute (No. 6788)\n Soumya P. Venkateswaran (No. 7278)\n 919 Market Street, Suite 1800\n Wilmington, Delaware 19801\n Telephone: (302) 467-4400\n Facsimile: (302) 467-4450\n Email: landis@lrclaw.com\n mcguire@lrclaw.com\n dute@lrclaw.com\n venkateswaran@lrclaw.com\n\n \u2013 and \u2013\n\n ADLER & STACHENFELD LLP\n Kirk L. Brett (admitted pro hac vice)\n Patrick O\u2019Connor (admitted pro hac vice)\n 555 Madison Avenue, 6th floor\n New York, New York 10022\n Telephone: (212)883-1700\n Facsimile: (212)883-8883\n Email: kbrett@adstach.com\n poconnor@adstach.com\n\n Counsel to 356W58 Ground Lessor LLC\n\f","ocr_status":2,"date_upload":"2026-09-04T07:59:19.325057-07:00","document_number":"93","attachment_number":null,"pacer_doc_id":"042023078393","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Dismiss Adversary Proceeding - Motion","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/492532802/","id":492532802,"tags":[],"absolute_url":"/docket/72070200/93/1/hudson-17011706-llc-v-356w58-ground-lessor-llc/","date_created":"2026-09-04T06:54:03.366245-07:00","date_modified":"2026-09-28T04:02:35.018610-07:00","sha1":"b6b05620f33dfd9fa48b6069a1e0a16501d3f29a","page_count":3,"file_size":117694,"filepath_local":"recap/gov.uscourts.deb.200092/gov.uscourts.deb.200092.93.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.deb.200092/gov.uscourts.deb.200092.93.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 25-52471-KBO Doc 93-1 Filed 07/09/26 Page 1 of 3\n\n\n\n\n EXHIBIT A\n\f Case 25-52471-KBO Doc 93-1 Filed 07/09/26 Page 2 of 3\n\n\n\n\n IN THE UNITED STATES BANKRUPTCY COURT\n FOR THE DISTRICT OF DELAWARE\n\nIn re: Chapter 11\n\nHudson 1701/1706 LLC, Case No. 25-11853 (KBO)\n\n Debtors. 1 (Jointly Administered)\n\n\nHUDSON 1701/1706, LLC, a Delaware limited\nliability company; and HUDSON 1702, LLC, a\nDelaware limited liability company,\n Adv. Proc. No. 25-52471\n Plaintiffs,\n Ref. No. ____\n v.\n\n356W58 GROUND LESSOR LLC, a Delaware\nlimited liability company,\n\n Defendant.\n\n ORDER GRANTING 356W58 GROUND LESSOR LLC\u2019S\n MOTION TO DISMISS THE AMENDED COMPLAINT\n\n Upon consideration of the motion of 356W58 Ground Lessor LLC (\u201cLandlord\u201d) to dismiss\n\nthe amended complaint (the \u201cMotion\u201d) 2; and the Court having considered the Motion and any\n\nopposition thereto; and the Court having determined that the relief requested in the Motion is in\n\nthe best interests of the Debtors, their estates, and their creditors; and this Court having jurisdiction\n\nto consider the Motion and the relief requested therein in accordance with 28 U.S.C. \u00a7\u00a7 157 and\n\n1334; and the Court having found that this is a core proceeding; and the filing of the Motion in this\n\ndistrict is proper pursuant to 28 U.S.C. \u00a7\u00a7 1408 and 1409; and the Court having found that\n\n\n\n1\n The Debtors in these chapter 11 cases, along with the last four digits of each Debtor\u2019s federal tax identification\nnumber, are Hudson 1701/1706, LLC (0281) and Hudson 1702, LLC (0190). The Debtors\u2019 headquarters and the\nmailing address for the Debtors is 11440 San Vicente Boulevard, 2nd Floor, Los Angeles, CA 90045.\n2\n Capitalized terms used but not defined herein shall have the meanings given to them in the Motion.\n\f Case 25-52471-KBO Doc 93-1 Filed 07/09/26 Page 3 of 3\n\n\n\n\nLandlord\u2019s notice of the Motion and opportunity for a hearing were appropriate under the\n\ncircumstances and that no other notice need be provided; and the Court having determined that the\n\nlegal and factual bases set forth in the Motion establish cause for the relief granted herein; and\n\nupon all of the proceedings had before this Court, and after due deliberation and sufficient cause\n\nappearing therefor,\n\n IT IS HEREBY ORDERED THAT:\n\n 1. The Motion is GRANTED as set forth herein.\n\n 2. All objections to the Motion are overruled.\n\n 3. The Amended Complaint is dismissed with prejudice effective as of the date of the\n\nentry of this Order.\n\n 4. Notwithstanding the applicability of any Bankruptcy Rules to the contrary, the\n\nterms and conditions of this Order shall be effective and enforceable immediately upon entry of\n\nthis Order.\n\n 5. This Court retains jurisdiction with respect to all matters arising from or related to\n\nimplementation of this Order.\n\f","ocr_status":1,"date_upload":"2026-09-04T08:00:23.217417-07:00","document_number":"93","attachment_number":1,"pacer_doc_id":"042023078394","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit A","acms_document_guid":""}],"date_created":"2026-07-09T16:32:43.254162-07:00","date_modified":"2026-09-04T06:50:32.538437-07:00","date_filed":"2026-07-09","time_filed":"19:04:22","entry_number":93,"recap_sequence_number":"2026-07-09.001","pacer_sequence_number":325,"description":"Motion to Dismiss Adversary Proceeding Filed by 356W58 Ground Lessor LLC. (Attachments: # 1 Exhibit A) (McGuire, Matthew) (Entered: 07/09/2026)","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=72070200&page_size=40"}