By JAMES FINK AND KELSEY SWANEKAMP
Business First/Buffalo Law Journal

Citing a need for additional marketing time to find a buyer, a federal Bankruptcy Court judge has set a new auction date for the Statler Towers.

Western District of New York Bankruptcy Court Chief Judge Hon. Carl Bucki agreed Wednesday morning to push back the Statler's court-imposed auction from July 14 to Aug. 12. Bucki agreed to the later date after hearing from lawyers involved in a dispute with the Statler's owner, BSC Development Buffalo LLC.

At the same time, Bucki signed off on the recommendation that Cash Realty & Auctions LLC of Buffalo be retained to handle the marketing and auction of the 18-story landmark building, which overlooks Niagara Square.

"This now gives us a reasonable amount of time for someone to come in, check out the property and make a reasonable bid," said Cash Cunningham, Cash Realty founder and president.

Cunningham said he will invest approximately $15,000 to market the Statler, not only in the Buffalo Niagara region but also in such cities as Toronto and New York City.

Julia Kreher, a partner with Hodgson Russ LLP and special counsel to court-appointed trustee Morris Horwitz, said her firm has heard from several prospective bidders.

At issue during Wednesday's hearing was the previously established time frame Bucki set to auction the Statler. Bids were originally due on July 9, with the auction set for July 14.

"We thought with the marketing plan that was proposed - which was fairly comprehensive, having the auction date three weeks from now (July 14) - didn't give enough time to interested bidders," said Raymond Fink, a partner with Harter Secrest & Emery, who represents Mohmoud al Issa, father of British investor Bashar Issa. The younger Issa is the principal in BSC Development Buffalo LLC, while his father claims to hold the $4.5 million mortgage on the property.

"We had to make sure the process was reasonable and efficient and that it wasn't confusing," Fink added.

Under the guidelines set by Bucki, the Statler's auction will be held at 11 a.m. Aug. 12 in Statler Towers. Any bidder must put up a $100,000 deposit.

The successful bidder must then put 10 percent of the purchase price down and pay a 7.5 percent bidder's premium by Aug. 14. Objections to the bid must be submitted to the Bankruptcy Court by Aug. 17. Bucki will hold a hearing on Aug. 18 to sign off on the bid.

The deal is expected to close by Aug. 28.

Bucki approved the recommendation of all the attorneys in the case to appoint Cunningham as the Statler's auctioneer.

David Fiegel, director of auction sales and services from GoIndustry DoveBid, objected, saying he had had earlier conversations with the trustees about providing his firm's services. Fiegel said he hoped his firm could fetch as much as $2.5 million - or more - for the building.

Kreher, however, said the trustees felt more comfortable working with Cunningham. Fiegel's firm was equally qualified, she added.

"We can't afford to have a bidding war going on between two auctioneers," Kreher said.