KeyBank clears another judicial hurdle in Perkins Rowe foreclosure

Yet another hurdle in KeyBank National Association’s long-running battle to foreclose on Perkins Rowe was removed Wednesday when the 5th Circuit Court of Appeals upheld a district court ruling in favor of the Ohio-based lender on the issue of lien priority. ThornCo, which is owed nearly $1.8 million by developer Tommy Spinosa for construction work done on the mixed-use development, had challenged KeyBank’s priority as the prime mortgage holder—essentially trying to step ahead of the bank in line to get paid once a foreclosure sale takes place. U.S. District Judge James Brady earlier this year sided with KeyBank on the issue, ruling the bank, which is owed some $200 million, is the prime mortgage holder. Wednesday’s decision affirming Brady’s earlier ruling will likely discourage other lien holders from attempting to intervene in the process before foreclosure can take place, according to sources familiar with the case. No date has been set for the foreclosure, which was affirmed by the district court and the 5th Circuit Court earlier this fall. —Stephanie Riegel