Crain’s New York Business ran the story that morning. The Real Deal picked it up the same day.

We are proud of it. But a headline is not the interesting part, so here is the case underneath it.

What the coverage was about

Our client, developer Eli Karp of Hello Living, was facing a judgment of roughly $16 million.

It came out of the foreclosure of 271 Lenox Road, a 55-unit rental building in Prospect Lefferts Gardens. The building went back to the lender. The lender then came after Mr. Karp personally for the shortfall.

We came into the matter as successor counsel earlier this year.

We moved to vacate the judgment and argued that the appraisal it was built on did not hold up. A Brooklyn Supreme Court judge agreed there was enough of a problem with the numbers to put the judgment on hold and let our client put his own appraisal in front of the court.

The lender has since asked the judge for a chance to re-argue. So this is a step, not an ending. We will say that plainly rather than pretend otherwise.

Why a deficiency judgment is worth fighting

When a property sells for less than what is owed, the gap does not just disappear. If there is a personal guarantee, the lender can chase the guarantor for it.

And the size of that gap comes down to one thing. What the property was worth.

That number arrives looking like a fact. It is not. It is an opinion produced by a person using a method, and both the person and the method can be questioned.

Most guarantors never question it. By the time they think to, the window has usually closed.

The part that does not fit in a news story

Coming into a case that is already underway is a different job than starting one.

The record is built. Deadlines have already passed or are about to. Someone else made the strategic calls, and you inherit all of them.

The first real work is not legal. It is reading everything that happened and being honest with the client about which doors are still open and which ones are not.

One thing we are not going to do here

The reporting also covers a separate malpractice claim our client has filed against his former attorney.

Those are allegations. They have not been decided by any court. We are not going to argue that case on our website, and we would be wary of any firm that did.

If you are in a similar spot

If you are a developer, a sponsor, or a personal guarantor looking at a deficiency judgment, or you are unsure whether the appraisal behind it was ever properly tested, the timing usually matters more than anything else.

Reach out and we will tell you honestly what we think can and cannot be done.

Read the coverage