In complex litigation arising from a MURB real estate investment and foreclosure action, investor defendants sought a preliminary determination that the development had never achieved a cash flow positive position before the foreclosure proceeding was commenced.
They argued that accounting adjustments relied upon by the developer improperly imputed notional rental income and altered expenses, which if rejected would demonstrate that the mortgage was never in default.
The court held that the competing accounting methodologies, contractual interpretation of the offering memorandum and cash flow guarantee, and disputed factual issues regarding market conditions, vacancies, and management could not be resolved summarily.
These matters required full examination through the reference previously ordered in the case management process.
