WilmerHale has received an Outstanding Achievement Award from the Washington Lawyers’ Committee for Civil Rights and Urban Affairs. The firm was recognized for pro bono work that led to a settlement in the US Bankruptcy Court for the District of Columbia, providing approximately $4 million to low-income residents of the Ward 8 Forest Ridge and Vistas apartment complexes.
The firm received the award at the Washington Lawyers’ Committee’s recent annual luncheon, which celebrates individuals and organizations working to dismantle injustice and pursue lasting change.
In 2020, a WilmerHale team achieved an important victory for pro bono clients Horton’s Kids—an organization serving at-risk youth in the apartment complex—and eight individual residents of the Forest Ridge and Vista Ridge apartments. The DC government brought suit against the complex’s owner and management company, alleging that the properties were maintained “in a serious state of disrepair.” The District also asserted a claim under the Drug-, Firearm-, or Prostitution-Related Nuisance Abatement Act, pointing to nine homicides and countless drug offenses that had been committed in the complex in recent years.
The owner sought to sell the apartment complex in early 2019. His limited partnership filed for bankruptcy protection to take advantage of an exception to DC’s Tenant Opportunity to Purchase Act, which would have otherwise provided a tenants association with a right of first refusal to purchase the properties. The process of offering tenants their statutory right of first refusal would have likely delayed a sale by many months. The DC statute, however, contains an exception for sales conducted in bankruptcy.
WilmerHale was retained by Horton’s Kids soon after the bankruptcy filing, in part to determine whether the bankruptcy could be challenged on the ground that the case did not serve an appropriate chapter 11 purpose. Along the way, however, a bidder for the property emerged that was an experienced and responsible developer of low-income housing projects, with plans to acquire the property and improve conditions. After meeting with the potential buyer, Horton’s Kids decided against challenging the sale, and instead supported it.
Because, however, the sale would generate millions of dollars in proceeds in excess of the limited partnership’s indebtedness, WilmerHale and Horton’s Kids determined to help the residents file proofs of claim in the bankruptcy case seeking to recover damages on account of the deplorable conditions of their residences. As a matter of bankruptcy law, all such valid creditor claims need to be paid in full before any money can be distributed to the owner of the property. Working with the Washington Lawyers’ Committee and Bread for the City, the firm set up clinics through which 97 residents filed proofs of claim in the bankruptcy case.
The WilmerHale team then partnered with the DC Attorney General’s Office to negotiate a global settlement with the property owner. The end result was a settlement that generated approximately $4 million in proceeds to the residents: $1.9 million in past rent that will be refunded as restitution to approximately 500 past and present tenants; $20,000 in damages that will be paid to each of the 97 residents who filed proofs of claim through the clinics; and several hundred thousand dollars that will be paid to Horton’s Kids and other organizations to improve the services provided to the community.
The WilmerHale team included Partners Ciara Baker and Matt Schnall, Pro Bono Counsel Christopher Herrling, Counsel Isley Gostin, Associate Allyson Pierce, and Discovery Attorneys Jenny Cox, John Hardisky, William Miller and Daniel Teti.