CG Prevents Mass Eviction in Unprecedented Case

February 2, 2005

Cleary Gottlieb, working with the Northern Manhattan Improvement Corporation, successfully prevented the eviction of 21 tenants and their families (totaling approximately 75 people) from their homes in Washington Heights.

The tenants requested Cleary Gottlieb’s emergency assistance after they were informed on January 25 that they had to vacate their apartments by February 5 or face forcible eviction by U.S. Marshals the following day.  Some of the tenants have lived in the building for 30 or 40 years.  Their average annual household income is $19,000.  Many of the tenants do not read English and have modest educational backgrounds.

The owner of the property filed for Chapter 11 bankruptcy protection in Manhattan in late 2002 after failing to pay taxes for several years.  The building was sold pursuant to a court-approved auction in December 2004 as part of the owner’s plan of reorganization.

The bankruptcy court order approving the sale and confirming the plan purported to allow the purchaser and the U.S. Marshall to forcibly evict the tenants, to seize their possessions and subject them to arrest.  These extraordinary provisions were never requested or disclosed in any pleadings filed with the bankruptcy court or mailed to the tenants.

To prevent the mass eviction, Cleary Gottlieb filed a complaint with the bankruptcy court seeking revocation of the eviction order on the basis of fraud, lack of due process and lack of jurisdiction, along with an emergency motion to enjoin the evictions.  At a hearing on the same day, Judge Prudence Carter Beatty issued an order halting the eviction and revoking the eviction order on the basis of Section 1144 of the Bankruptcy Code, which permits revocation of an order procured by fraud.

Cleary Gottlieb’s representation of the tenants in this matter is part of an ongoing effort at the firm to provide pro bono assistance to tenants whose landlords are in bankruptcy.