McCarthy v. Collins (In re SPG of Schenectady, Inc.)

The subject of this appeal is a restaurant business encumbered originally by a single mortgage to a bank. The owner sold the business and took back a mortgage. Shortly thereafter, the purchaser in turn sold the property and also took back a mortgage as part of the purchase price. The third owner then had a restaurant saddled with three mortgages. While such “borrowing” may not have dulled the third owner’s “edge of husbandry,” it did result in a cash crunch that unsurprisingly rendered the owner unable either to service the mortgages or to pay the fire insurance premiums on the property.…