Perkins Rowe attorneys argue for federal court to move suit

In their first appearance in open court since a suit was filed in the summer, attorneys for Perkins Rowe told a federal judge this morning that the foreclosure lawsuit against the mixed-use development should be thrown out of federal court on the grounds the system doesn’t have proper jurisdiction over the case. But attorneys for KeyBank National Association, the main lender on the project, argued that federal court is the proper venue for the proceedings. In their arguments, Perkins Rowe attorneys said the case should be thrown out of federal court because of a lack of true geographic diversity among the plaintiffs in the case. Citing the participation of Bank of New Orleans as one of the lenders in the consortium, they suggested the foreclosure suit should be remanded to state court. But lawyers for KeyBank argued that there is true diversity in the case, as eight of the nine banks in the consortium of lenders are from out of state. What’s more, they said, the only Louisiana bank, BNO, has less than a 1% share of the $170 million construction loan. They also suggested the motion to dismiss is a stalling tactic that, if successful, would harm creditors and tenants at Perkins Rowe. U.S. District Judge James Brady did not rule today, but he took the matter under advisement.—Stephanie Riegel