Landlord Goes for Broke to Intervene in Tax Appeal by Bankrupt Tenant

The Tax Court decided a case of first impression when it was asked to permit a landlord to intervene in a tax appeal to seek Freeze Act relief after a Bankruptcy Court judge entered an order reducing the assessment of the Subject Property following the entry of a Bankruptcy Court order.  Pathmark, as tenant, filed tax appeals for the shopping center where they were the anchor tenant.  After Pathmark filed for Chapter 11 bankruptcy, the landlord began filing tax appeals to protect its interests.  Pathmark and the municipality came to an agreement on the assessment for the 2010 tax year, which was memorialized in an order entered by the Bankruptcy Court.  Thereafter, the landlord asked to intervene not to challenge the agreed upon value, but to ask the Tax Court to enter a Freeze Act judgment for 2011 in agreement with the Bankruptcy Court’s order.

Because the Bankruptcy Court retained jurisdiction over the 2010 tax appeal, the Tax Court held that it was without authority to enter a Freeze Act judgment for the 2011 tax appeal.  The Tax Court noted that the Bankruptcy Court’s broad authority gave it original jurisdiction to decide real property tax appeals that were timely filed in the Tax Court.  However, the Tax Court also held that a landlord could seek Freeze Act relief for a Freeze Act year even if the tenant obtained the original judgment.  Thus, the Tax Court gave the parties until April 30, 2014, to provide direction or an order from the Bankruptcy Court regarding the entry of a Freeze Act judgment.

A copy of the Tax Court’s opinion in Pathmark Edison, Inc. TT & A of Owner and OTR Associates v. Township of Edison may be found here.

For more blog posts discussing third parties intervening in a tax appeal, please see the following:

Retail Landlord Prevails on Right to Control Tax Appeal

Appellate Court: Contract Purchasers Have Standing to File Tax Appeal