This page uses extracted PDF text. Text can misread numbers, dates or table columns. Check the PDF before quoting or interpreting it. Redacted areas remain redacted.
5
The Receivership was Required to Protect the Property
and Ultimately Sell the Property
22.
The Receivership Complaint described the typical scenario where appointment of
a receiver is necessary, namely, an insolvent borrower incapable or unwilling to operate and
maintain the collateral property and to pay the underlying secured debt and critical property-related
expenses. The Debtor was unable or unwilling to adequately protect the Property, ultimately
resulting in substantial deterioration of the Property and its value and causing its tenants to suffer.
23.
The suffering of the former tenants at the Property – which was a symptom of the
Debtor’s mismanagement and failure to protect the Property – is described in excruciating detail
in the Second Amended Complaint of many of the former tenants at the Property filed in Case No.
CL2202900M now pending in the Virginia Circuit Court (the “Tenant Litigation”). A true and
complete copy of the former tenants’ Second Amended Complaint is attached as Exhibit 3.
24.
The Debtor wholly mismanaged the Property. It failed to maintain the Property
causing two condemnations. It failed to protect its tenants. After the second condemnation, it
failed to secure and protect the Property, subjecting the Property to damage by intruders.
25.
After the second condemnation, the Debtor allowed squatters and intruders access
to the Property. Those squatters and intruders vandalized the Property and damaged personalty on
site.
26.
In the almost six months from the time of the second condemnation to the
appointment of the special receiver, the Debtor apparently did virtually nothing to remedy the sorry
conditions at the Property. Specifically, there was no progress on restoring power to the building
or any attempt made to clean up the deplorable conditions. I understand the Debtor had allowed
the insurance to lapse for a period perhaps as long as 18 months which is likely why there was no
power restoration work in progress at the time of the Receiver’s appointment.
Case 25-23251-MEH Doc 18-13 Filed 12/22/25 Entered 12/22/25 20:08:18 Desc
Affidavit Page 5 of 16
ANN public copy | complete ECF 18-13 | combined source PDF 228/478
Jump to an indexed page (16 of 16)