Bankruptcy Judge Halts Rushed Auction of Detroit's Historic Leland House Building, Delivering Temporary Win for Displaced Tenants
A federal bankruptcy judge has intervened once again in the fight over Detroit's historic Leland House building, halting a fast-tracked auction of the 99-year-old apartment complex and delivering a temporary win for displaced tenants who say they were being stripped of their rights without due process.
On Thursday, US Bankruptcy Judge Maria Oxholm denied a motion by the building's owner, Leland House Limited Partnership, to sell the property at 400 Bagley St. and an adjacent parking lot, after objections from the US Trustee, secured creditors, neighboring property owners, and tenants represented by the Detroit Tenants Union and the Leland House Tenants Union.
The ruling halts a planned auction set for March 9, which would have allowed the owner to sell the building quickly, potentially leaving hundreds of tenants without a home. Instead, the judge has ordered the owner to reconsider its bankruptcy strategy after months of emergency filings, tenant displacement, and an unexplained pivot from stabilizing the building to liquidating it.
This is not the first time Oxholm has intervened in the case. In early December, she barred DTE Energy from disconnecting power without court approval and allowed the owner to get a $1.2 million loan to handle some of its debts, including a deposit of over $57,000 to keep the power on.
The Leland House is a historic landmark in downtown Detroit that has been at the center of a bitter dispute between the building's owners and tenants. Despite the city's responsibility to advocate for its residents, Mayor Mary Sheffield has not taken a different approach, raising concerns among tenants and advocates that DTE Energy is trying to acquire the property on a block where the utility already owns most of the land and buildings.
However, a spokesperson for DTE Energy denied plans to purchase the Leland House, stating that the energy giant has no intention of buying the building.
The US Trustee objected to the proposed sale, citing concerns about valuation, structure, and protection for bidders. Secured creditors argued that the opening price was too low, while owners of neighboring property said the debtor had no authority to sell their land.
Tenant advocates welcomed the ruling as a temporary reprieve, saying it gives them breathing room and ensures that any future sale cannot happen behind closed doors or at the expense of those who lived there. "This decision is an important pause," said a statement from the Detroit Tenants Union. "It ensures that the rights of tenants will be protected and that we are not left without a home."
The court has left open the possibility that the owner could return with a revised sale proposal, but for now, the Leland House remains under the control of its current owners, and its future is uncertain.
A federal bankruptcy judge has intervened once again in the fight over Detroit's historic Leland House building, halting a fast-tracked auction of the 99-year-old apartment complex and delivering a temporary win for displaced tenants who say they were being stripped of their rights without due process.
On Thursday, US Bankruptcy Judge Maria Oxholm denied a motion by the building's owner, Leland House Limited Partnership, to sell the property at 400 Bagley St. and an adjacent parking lot, after objections from the US Trustee, secured creditors, neighboring property owners, and tenants represented by the Detroit Tenants Union and the Leland House Tenants Union.
The ruling halts a planned auction set for March 9, which would have allowed the owner to sell the building quickly, potentially leaving hundreds of tenants without a home. Instead, the judge has ordered the owner to reconsider its bankruptcy strategy after months of emergency filings, tenant displacement, and an unexplained pivot from stabilizing the building to liquidating it.
This is not the first time Oxholm has intervened in the case. In early December, she barred DTE Energy from disconnecting power without court approval and allowed the owner to get a $1.2 million loan to handle some of its debts, including a deposit of over $57,000 to keep the power on.
The Leland House is a historic landmark in downtown Detroit that has been at the center of a bitter dispute between the building's owners and tenants. Despite the city's responsibility to advocate for its residents, Mayor Mary Sheffield has not taken a different approach, raising concerns among tenants and advocates that DTE Energy is trying to acquire the property on a block where the utility already owns most of the land and buildings.
However, a spokesperson for DTE Energy denied plans to purchase the Leland House, stating that the energy giant has no intention of buying the building.
The US Trustee objected to the proposed sale, citing concerns about valuation, structure, and protection for bidders. Secured creditors argued that the opening price was too low, while owners of neighboring property said the debtor had no authority to sell their land.
Tenant advocates welcomed the ruling as a temporary reprieve, saying it gives them breathing room and ensures that any future sale cannot happen behind closed doors or at the expense of those who lived there. "This decision is an important pause," said a statement from the Detroit Tenants Union. "It ensures that the rights of tenants will be protected and that we are not left without a home."
The court has left open the possibility that the owner could return with a revised sale proposal, but for now, the Leland House remains under the control of its current owners, and its future is uncertain.
i mean, the tenants were getting screwed like no tomorrow, but thank goodness for justice (or at least, someone who likes to interpret it that way) - all those folks who've been living there for years can finally take a deep breath. though, i gotta ask, what's next? are they gonna start auctioning off the entire city? 
this is like some kinda crazy detroit adventure game!
?! It's just so frustrating that the system is set up to favor the wealthy over the working class. I mean, the owner's trying to sell the building as fast as possible just so they can make a quick buck and forget about anyone else 
. But what about those people who have been living there for years? Don't they deserve some protection? It's not like the city is doing much to help them out either... Mayor Mary Sheffield should really step up her game 
.
. They deserve so much more than just temporary reprieve. We need real change here, not just a slap on the wrist from the court system 
. The Leland House tenants should be able to live in peace without fear of being thrown out of their homes... it's just basic human decency 
.
This whole thing smells like a setup 
to get rid of the tenants quickly. I mean, what's up with the owner just going from stabilizing the building to liquidating it? That doesn't add up 
. And don't even get me started on DTE Energy's involvement - are they trying to corner the market or something? 
. Where's the evidence of this supposed "emergency" situation? And what about the valuation concerns from the US Trustee? That part of the story gets glossed over 
.
. Anyone got a link to a reputable article that breaks down the financials behind all this? 
. Maybe the owner was just trying to get out of debt, or maybe they're trying to make a quick buck? Whatever it is, I hope the tenants' rights are respected and they don't get caught in the crossfire again 
.
its like a tiny victory 4 these tenants who were gettin squeezed by their landlord i mean, can u imagine if they had to find a new place now? its stressful enough already 
but at least theres a chance for them 2 breathe a sigh of relief 4 now. lets keep hope alive 
! It's crazy how these tenants were being treated like they didn't matter – all because some rich investors wanted a quick buck off their home 
. I mean, can you imagine if this happened to your family or friends? It's not right.
. Now they get to breathe a sigh of relief and know that whatever happens next, it'll be on their terms, not some shady sale deal 
.
. We'll have to keep an eye on this one and make sure justice is served 
!