Philadelphia Bankruptcy and Creditors' Rights Attorney William Schorling Quoted on First Judicial District's Plans to Build Family Courthouse, Judge OKs Settlement

William H. Schorling, a shareholder and Executive Committee member of the Bankruptcy and Creditors' Rights Section at Buchanan Ingersoll & Rooney's Philadelphia office, was quoted in a November 3, 2010, article published in The Legal Intelligencer. The article, titled "Bankruptcy Judge OKs Family Courthouse Settlement," reported on plans of the First Judicial District — represented by Schorling — to build a family courthouse in Philadelphia.

As explained in the article, "The effort to build a unified, modernized Philadelphia family courthouse took another step toward becoming reality Tuesday with a bankruptcy judge's approval of a settlement of legal disputes over the courthouse site and architectural plans."

The article went on to explain how "Northwest 15th Street Associates, the owner of the courthouse site's air, surface and development rights, filed for bankruptcy June 23 because Northwest's agreements with the First Judicial District, the Philadelphia Parking Authority — which owns the courthouse site below ground and mortgaged the site aboveground to Northwest — and with architect EwingCole all were canceled. The agreements were canceled in the wake of the revelation that Jeffrey B. Rotwitt, who was retained by the court system to search for building locations and as a tenant representative, ended up on the other side of the project by striking a development fee-sharing deal with Donald W. Pulver, the principal behind Northwest 15th Street Associates. … No objections were made to the settlement of Northwest 15th Street Associates' bankruptcy."

According to the article, "U.S. Bankruptcy Judge Eric L. Frank of the Eastern District of Pennsylvania said during the hearing that, while there were public policy implications for ending the litigation in order to move the courthouse project forward, a bankruptcy court's role is not to consider public policy questions. The court's role is to assess the probability of the litigants' success in their court battle, the complexity of the litigation, the expense of litigation and the interest of the creditors, Frank said. … Frank said he was following 3rd U.S. Circuit Court of Appeals precedent in determining that the settlement is fair and equitable and that Northwest's creditors would not be adversely affected by the settlement."

Schorling told Frank this accord was unusual in "that it did permit all the parties to receive what they're interested in."

"The settlement includes the agreement of Northwest to sell the air, surface and development rights to the state Department of General Services in exchange for $1.1 million," noted The Legal.

"The settlement permits the courthouse to be built while preserving any claims the FJD might have against Rotwitt," Schorling said. Schorling also pointed out that Pulver had a real property interest at the courthouse site of 15th and Arch streets, on which he had tried to build other development projects that never got off the ground, long before the FJD had an interest in the property.