United States Securities and Exchange Commission v. Borland
- P. Castel
- 1:18-cv-04352
- U.S. District Court · Southern District of New York
- 3
In SEC v. Borland, Judge Castel granted Emigrant Residential’s motion to modify the asset freeze so foreclosure could proceed.
Emigrant Residential, LLC may proceed with its Florida foreclosure case and may be paid from a third-party sale if the Florida court finds its mortgage is a first mortgage. The Palm Beach County Circuit Court may conduct the sale, while any surplus proceeds remain frozen. The order affects the defendants and relief defendants whose property is subject to the asset freeze.
What happened
In United States Securities and Exchange Commission v. Borland, Emigrant Residential, LLC asked to change an order freezing assets in the SEC’s case. Emigrant said it held a mortgage on property in Palm Beach County, Florida, securing a $1.1 million promissory note owed by Alana La Torra-Borland.
Emigrant had filed a foreclosure case in Florida, but the asset freeze stopped that case from moving forward. It asked permission to continue the foreclosure and allow the property to be sold. The SEC did not oppose the request.
The court granted Emigrant’s motion. Judge Castel allowed the Florida court to sell the property under its normal procedures and issue title to the successful bidder. Emigrant could be paid from a third-party sale if the Florida court determines that its mortgage is the first mortgage; any surplus funds must remain frozen pending further order.
The detailed version
- United States Securities and Exchange Commission v. Borland · No. 1:18-cv-04352
- P. Castel
- May 6, 2020
Background
The caption names the defendants as Brent Borland, Borland Capital Group, LLC, and Belize Infrastructure Fund I, LLC. Canyon Acquisitions, LLC, and Alana LaTorra Borland are identified as relief defendants. Emigrant Residential, LLC intervened and moved to modify the asset freeze order.
Emigrant alleged that it is a New York limited liability company, formerly known as EMC LLC, resident in Florida and doing business in Palm Beach County, Florida. It alleged that Alana La Torra-Borland owed it $1,100,000 under a July 3, 2008 promissory note originally executed and delivered to Emigrant Mortgage Company. The note carried an adjustable interest rate.
Emigrant further alleged that Alana La Torra-Borland and Brent Borland executed a mortgage securing the note. The mortgage encumbered property at 1034 Lewis Cove Road, Delray Beach, Florida, and was recorded in Palm Beach County on July 8, 2008. Emigrant alleged that its mortgage was recorded before the SEC action and the associated claims became known, making its lien superior to later rights, claims, liens, or interests.
Florida Foreclosure Case
Emigrant filed a foreclosure action in Palm Beach County, Florida, on July 8, 2019. The asset freeze order stayed that foreclosure action. Emigrant therefore sought limited relief allowing the foreclosure case to proceed and the property to be sold to the highest bidder. The opinion states that the SEC did not oppose the requested relief.
Ruling
The court found the motion well taken and granted Emigrant’s motion to modify the asset freeze order. The modification permits the Palm Beach County Circuit Court to sell the property according to its regular procedures and allows that court’s clerk to issue title to the successful bidder.
Emigrant may be paid if the property is sold to a third party. Any surplus proceeds must remain with the Palm Beach County Circuit Court and remain frozen under the modified freeze order until this court issues a further order. The relief is conditional: the Florida court must find that Emigrant’s mortgage is a first mortgage, and any final foreclosure judgment must acknowledge and agree to the modified freeze order. Judge P. Castel entered the order on May 6, 2020.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.