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06/22/89 Trustees of Central States v. La Salle National Bank

June 22, 1989

PENSION FUND, PLAINTIFF

v.

LA SALLE NATIONAL BANK, AS TRUSTEE, DEFENDANTS (WAYNE JACKSON, PETITIONER-APPELLANT; TRUSTEES OF CENTRAL



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

TRUSTEES OF CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS

States, Southeast and Southwest Areas Pension

Fund et al., Respondents-Appellees)

542 N.E.2d 30, 185 Ill. App. 3d 734, 134 Ill. Dec. 30 1989.IL.962

Appeal from the Circuit Court of Cook County; the Hon. Thomas J. O'Brien, Judge, presiding.

APPELLATE Judges:

JUSTICE JOHNSON delivered the opinion of the court. LINN and McMORROW, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JOHNSON

Petitioner, Wayne Jackson, appeals from an order of the circuit court of Cook County denying his petition to void the sale of commercial property located in Chicago, Illinois. The sole issue presented for review is whether the trial court erred in failing to find that it lacked statutory jurisdiction to appoint a commissioner to conduct a sale of real estate subject to a mortgage foreclosure judgment.

We affirm.

Petitioner is the sole general partner of an Illinois limited partnership that held 100% of the beneficial interest in American Land Trust. American Land Trust held legal title to the commercial office building that was the subject of the action in foreclosure. The property was encumbered by three mortgage liens as of January 3, 1986. The first mortgage was held by respondent Trustees of Central States, Southeast and Southwest Areas Pension Fund. Lincoln National Pension Insurance Company held the second mortgage. The third mortgage was held by Johnstown/Consolidated Realty Trust, also a respondent. These mortgages secured a principal amount of debt in excess of $12 million.

Petitioner's partnership defaulted on the mortgage payments and respondents and Lincoln filed to foreclose their mortgage lien on the property. Petitioner's partnership then filed a Chapter 11 voluntary bankruptcy on February 13, 1986. On April 28, 1986, an agreed bankruptcy order was entered which set the terms of an agreed order of foreclosure for the judicial sale of the property. Petitioner's partnership was given a grace period in which to find a third-party purchaser for the property. The partnership failed to find a purchaser within the specified period of time.

On June 13, 1986, the agreed order for judgment of foreclosure was entered. This order and the agreed bankruptcy order called for the judicial sale of the property on July 7, 1986. A commissioner was appointed by the trial court to take bids on the property in the bankruptcy court. This allowed the bankruptcy Judge to observe the sale. The sale took place on July 24, 1986. Johnstown/Consolidated Realty Trust was the only bidder at $10.4 million. On August 15, 1986, respondents and Lincoln jointly moved to confirm the sale. The sale was confirmed on September 3, 1986.

Petitioner then filed a petition to set aside the order confirming sale and to void the commissioner's sale on December 16, 1986, more than three months after the sale had been confirmed. Petitioner argued that the sale was void because, although the agreed foreclosure order was entered in circuit court, the sale was held on Federal property in a bankruptcy courtroom. On January 15, 1987, after the property was sold to a third-party purchaser, petitioner filed an amendment to ...


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