City of Richmond v. RWS, Inc.

This is a suit to sell real estate due to delinquent real estate taxes owed the City of Richmond.

On March 6, 1996, Mr. Wesley appeared requesting the entry of a decree of sale. I was reminded then that on February 8, 1996, Mr. Hackney, counsel for a noteholder with a secured interest, appeared with Mr. Wesley to argue that instead of accepting private bids for a sale, the court should require a public auction. Mr. Wesley took the position that a sale by private bid does not offend the secured party’s interest because that party is as free to make a bid as anyone. Mr. Hackney argued mainly that a public auction would make bid prices known so that his client can tender a bid or not accordingly. There was also some discussion regarding whether the City would make known a private bid it has received but Mr. Wesley declined to do so. Both counsel agree whether private bid or public auction is a matter of discretion with the court.

The City cites Conrad v. Fuller, 98 Va. 16 (1900), as authority for a matter such as this as being within the court’s discretion. That case says that whatever approach is taken the court should be mindful of obtaining the best price. This indeed is the objective.

It has been revealed that the only parties interested in this property are an offeror who has made a private bid and the secured party who wants a public auction.

The City has been carrying this property for some time in a delinquent tax status. At this point, without interest being shown for the property other than by the present offeror and the secured party, the expense of a *462public auction is a factor to be considered, considering too that the note-holder has not chosen to step forward to foreclose, after some, period of delinquency on the underlying obligation. In view of these circumstances, because of the necessary expenses attendant to a public auction and the present ability to make a bid privately, I think the private bid approach better serves the interest of getting the best price here.

Under these circumstances the court elects to allow a private bid.