The First Department Makes It Much Harder for Borrowers to Enjoin UCC Foreclosure Sales

The Appellate Division, First Department recently issued an important decision concerning the availability of injunctive relief to halt foreclosure sales under the Uniform Commercial Code (“UCC”).  In Shelbourne BRF LLC v. SR 677 Bway LLC, Case No. 2020-03604 (1st Dep’t Mar. 4, 2021), the First Department considered a New York County Supreme Court decision that enjoined a UCC foreclosure sale of interests in LLCs that owned a commercial office building for approximately 86 days from when it was originally scheduled, and required the plaintiff borrowers to post a bond of $100,000, holding that the Supreme Court erred in granting the injunction because the plaintiffs could not demonstrate irreparable injury.  The First Department’s decision is a reminder of the high barriers that borrowers face in obtaining injunctive relief to stop a UCC foreclosure sale from occurring where there had been a default on the underlying obligation.