An ABI Committee Newsletter
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| Vol 24, Num 2 | September, 2025
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by
Shelby Kostolni, Stinson LLP (Washington, D.C.)
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Retailers everywhere appear to be filing chapter 22 — even chapter 33 — bankruptcies. This results in multiple litigation questions, the most recent of which pertain to Rite Aid.
Rite Aid filed for bankruptcy on Oct. 15, 2023, in the U.S. Bankruptcy Court for the District of New Jersey (the “First Rite Aid Case”). The first plan was confirmed on Aug. 16, 2024, and was substantially consummated two weeks later. In the course of and after the First Rite Aid Case, several parties appealed various orders of the court. However, less than 10 months later, Rite Aid filed a second chapter 11 petition in the same court (the “Second Rite Aid Case”). On May 5, 2025, less than two weeks after filing the Second Rite Aid Case, Rite Aid filed a motion to clarify that the automatic stay applies to the appeals, or alternatively, to stay the appeals pending the
resolution of the Second Rite Aid Case. After multiple objections from various parties, the Court ultimately found that the automatic stay applied to the appeals.
With the court’s ruling, seven appeals related to the First Rite Aid Case have been stayed, and the Second Rite Aid Case theoretically will continue as a typical case. As a result of this, Rite Aid, as of the writing of this article, has filed notices of the closing of more than 1,000 stores, with plans to close all Rite Aid stores throughout the U.S.
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by
Andrew Glantz, Xclaim Inc. (New York)
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Back in May, Grant Cardone submitted a $230 million stalking-horse bid for a 366-unit luxury apartment complex in Boca Raton owned by debtor Via Mizner Owner I LLC that set a floor for a § 363 auction in the debtors’ chapter 11 cases pending in the U.S. Bankruptcy Court for the Southern District of Florida Cardone later improved the bid (all cash) to $235 million, the debtors proceeded to cancel the auction, and the court on July 10 approved the sale to Cardone on the improved terms. The sale, while not especially notable in and of itself, signals a potential new trend in who shows up at bankruptcy auctions and bidder motivations. In this case, Cardone’s plan is to use the real estate as a hook to sell access to crypto at a premium.
Via Mizner, a subsidiary of Penn-Florida Cos., filed for bankruptcy after defaulting on a $195 million first-lien loan from an affiliate of Blackstone Mortgage Trust. The property is in a prime location next to world-class golfing and retail and blocks from beautiful clubs and beaches. Its woes stem from project-development standstills at two adjacent parcels (also owned by Penn-Florida) that were slated for a Mandarin Oriental Hotel and Mandarin Residences. With the shell of a half-finished construction project effectively abandoned next door since 2023, Via Mizner has struggled to keep occupancy up and service its debt despite overall positive
trends in the local luxury rental market.
Cardone’s bet is an unusual one. He proposes to merge the Via Mizner property with a $100 million slug of Bitcoin (BTC) and syndicate the package to retail investors. His pitch is that the real estate/BTC mix will allow him to plow rental cash flows into more BTC when crypto prices fall and to buy more real estate assets when crypto prices rise. But there are no obvious synergies between rental properties and BTC, and historically weak correlation between these asset classes mean both could easily fall in value at the
same time. In June, the Ninth Circuit Court of Appeals in Christine Pino vs. Cardone Capital et al revived a securities class action lawsuit against Cardone Capital claiming fraudulent misrepresentation related to earlier real estate investment offerings. If this project fails, he’ll almost certainly face another.
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