DALLAS — A temporary injunction to block foreclosure proceedings against the Dallas Market Center was granted Friday in Dallas County Court.
The ruling by Judge Michael O’Neill ended seven days of courtroom sparring between attorneys representing lenders The Equitable Life Assurance Society of the U.S. and Dai-ichi Life U.S.A. and the DMC owner Trammell Crow Interests. The DMC is a 125-acre complex of wholesale facilities that include the International Apparel Mart and Menswear Mart.
In granting the temporary injunction against foreclosure, O’Neill said the Crows must post a $3.25 million equity bond to maintain control of the market center. “The bond will insure the lenders that the payment hurdle will be met,” he said. O’Neill scheduled a hearing for the last week of March to permanently deal with the foreclosure issue.
The lenders posted notice in October that they might foreclose if agreement was not reached on restructuring a $450 million loan on the DMC to Trammell Crow Interests. In November, the Crow family moved to block the seizure.
Commenting on the injunction, Jonathan Miller, senior vice president of Equitable Real Estate in New York, said, “It’s a small bump in the road, but just a minor one. We intend to move forward to seek a conclusion to this matter as quickly as we can. That’s been our intention for the past several months since we filed the foreclosure action and continues to be.”
The Crow family has argued that Equitable’s consent in 1992 to tenant concessions at the DMC, including rent reductions, affected its obligation to pay a $4.4 million interest payment due last March 31. The concessions came about when a tenant group threatened to vacate the International Apparel Mart.
“A mart is worth nothing if it has no permanent or temporary tenants,” said O’Neill. “The lenders knew the borrowers would have to meet the shortfalls or face foreclosure [when they granted the concessions].”
In his opinion, O’Neill said although no provision was stated in the loan, made in 1987 and restructured in 1992, for possible fiduciary effects of tenant concessions, both sides knew the ramifications would have to be addressed.
“The parties in this case have dealt with each other as sophisticated partners for a long time,” he said. “Fiduciary duties go with the relationship on both sides.”
Lucy Crow Billingsley, Trammell Crow’s daughter, and former chairman of the DMC, said at the hearing’s end that she wanted to meet with the lenders and their counsel before commenting on the ruling.