Court of Appeals of Ohio, Eighth District, Cuyahoga
YIDI, L.L.C. PLAINTIFF-APPELLEE
JHB HOTEL, L.L.C., ET AL. DEFENDANTS-APPELLANTS
Appeal from the Cuyahoga County Court of Common Pleas Case
ATTORNEYS FOR APPELLANTS Jeffery D. Rengel Thomas R. Lucas
ATTORNEYS FOR APPELLEE FOR MARK E. DOTTORE, RECEIVER Harvey
Labovitz Elizabeth E. Collins Tim L. Collins Joseph Gutkoski
Collins & Scanlon, L.L.P.
YIDI, L.L.C. Robert T. Glickman Robert R. Kracht Charles A.
Nemer Danielle G. Garson McCarthy, Lebit, Crystal &
BEFORE: Keough, A.J., Kilbane, J., and Blackmon, J.
JOURNAL ENTRY AND OPINION
KATHLEEN ANN KEOUGH, ADMINISTRATIVE JUDGE
Defendants-appellants, JHB Hotel L.L.C., 3M Realty L.L.C., 3M
Development L.L.C., and Hickory Court L.L.C. (collectively
"appellants"), appeal from the trial court's
judgment approving the receiver's motion to sell real
property (the "sale order"). Finding no merit to
the appeal, we affirm.
Background and Procedural History
This case originated in August 2015, when plaintiff-appellee,
Yidi, L.L.C. ("Yidi"), filed a breach of contract
and foreclosure action against appellants seeking repayment
for a series of loans guaranteed by three properties located
on Euclid Avenue in Cleveland (the "property").
The trial court, upon Yidi's request and pursuant to an
agreed order, appointed Mark Dottore as receiver (the
"receiver"). The court subsequently granted the
receiver's unopposed motion to approve (1) the retention
of Hanna Commercial and David Wagner to market the property,
and (2) the procedures for the marketing of the property and
the submission of sealed bids on the property.
After vetting several potential buyers, the receiver
ultimately determined that a $9.1 million bid from Alto
Partners, L.L.C. ("Alto") was the highest and best
offer for the property. On July 20, 2016, he filed a motion
seeking a court order authorizing him to sell the property to
Alto. The court set a hearing on the receiver's motion
for August 2, 2016. The day before the hearing, appellants
filed a "notice of filing competing offer to purchase
receivership property" with the trial court. The offer
was for $9.5 million by SRI, L.L.C., the equity investor in
JHB Hotel, L.L.C., the fee simple title holder to the
property. (Thus, the offer was essentially by appellants.)
The trial court held the scheduled hearing on August 2, 2016.
Wagner, the receiver, and Michael Sabracos, president of U.S.
operations for Alto, testified at the hearing. The receiver
testified that the Alto offer was the highest and best offer
for the property because Alto had submitted documentation
demonstrating that it had the financial ability to purchase
the property, had experience in developing similar commercial
properties, and had committed $450, 000 in nonrefundable
monies if the deal ultimately did not go forward. He
testified that although SRI's offer was higher, it had
not been submitted in accordance with the sealed bidding
procedures and that SRI, unlike Alto, had not submitted any
documentation regarding its financial ability to close on the
transaction and complete the project. Further, SRI's bid
contained a 30-day contingency and a $100, 000 refundable
deposit. He admitted, however, that he had not fully vetted
After the hearing, on August 4, 2016, the trial court granted
the receiver's motion and issued the sale order
authorizing the receiver to sell the property to Alto. As
part of the sale order, the trial court granted appellants
three days to exercise their equity of redemption. This
Law and Analysis