87 Jacobus Ave faces motion for dismissal of ‘bad faith’ case

By Sarah Lizee

Olympia, Wash., July 10 – 87 Jacobus Ave LLC’s Chapter 11 bankruptcy case should be dismissed, counsel for the town of Kearny, N.J., said in a motion filed Friday with the U.S. Bankruptcy Court for the District of New Jersey.

The town said the debtor is just a shell company seeking bankruptcy for the admitted primary and sole purpose of staying tax sale foreclosure litigation by Kearny.

“The debtor is attempting to procure a piece of abandoned property that has had over $70 million invested in it from United States and New Jersey public funds,” the town said in the motion.

The property is also encumbered by a tax lien held by the town of Kearny, the town said.

“The debtor’s bankruptcy filing serves no legitimate bankruptcy purpose – there is no business to reorganize, the debtor’s sole business activity is the alleged possession of the property subject to litigation outside the bankruptcy court, and the filing was made admittedly and explicitly to achieve the accompanying automatic stay,” the town said.

“The defendant’s behavior amounts to egregious misconduct such that the facts, both pre- and post-petition, leave this court with the compelling basis to find a lack of good faith, and thus cause for dismissal.”

The Hudson, N.J.-based company filed bankruptcy on June 7 under Chapter 11 case number 23-14955.

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