In the Chapter 11 cases of BH Downtown Miami, LLC and 340 Biscayne Owner LLC, an unsuccessful auction participant has filed an expedited motion seeking court approval to purchase the debtors' real property at 340 Biscayne Boulevard in Miami, Florida for $107 million — $12 million more than the winning auction bid. The motion, filed on February 19, 2026, in the United States Bankruptcy Court for the Southern District of Florida, challenges the fairness of the auction process and asks the court to approve the higher post-auction offer as a better alternative for the bankruptcy estate.
Debtor Background and Property
BH Downtown Miami, LLC and 340 Biscayne Owner LLC filed voluntary Chapter 11 petitions on December 13, 2024 and have been operating as debtors-in-possession. 340 Biscayne Owner LLC is the sole fee simple owner of the property located at 340 Biscayne Boulevard in Miami, Florida. BH Downtown Miami, LLC is the sole member of 340 Biscayne Owner LLC, holding 100% of its outstanding membership interests. Both entities are Delaware limited liability companies.
The property currently operates as a Holiday Inn hotel and consists of approximately 39,982 square feet of land. The legal description identifies the property as Parcels, Lots 1, 2, 3, and 4, in Block 83 North, Map of Miami-Dade County, Florida.
The Resumed Auction and Alleged Process Issues
The court previously approved sale and auction procedures for the property. A resumed auction was held on January 28, 2026, with only two registered bidders: the movant, 340 Blue Sky, LLC, and a lender. 340 Blue Sky submitted a bid of $91 million at the auction but declined to increase its offer. The lender ultimately prevailed with a winning bid of $95 million.
The motion raises several concerns about the conduct of the auction process. According to the filing, 340 Blue Sky's registration for the resumed auction encountered the same difficulties it had experienced during a prior auction attempt, which the movant suggests may explain the limited bidder participation. The motion further alleges that 340 Blue Sky's representatives were asked at the outset of the auction how high they were willing to bid and were informed that the lender intended to bid its full credit bid amount. The movant contends that these factors undermined its confidence in the fairness of the process and influenced its decision not to raise its bid. The filing also notes that the auctioneer failed to establish an information phone line during the timeframe directed by the court.
The $107 Million Post-Auction Offer
Following the auction, 340 Blue Sky presented a signed Purchase and Sale Agreement to the debtor with a purchase price of $107 million, representing a $12 million premium over the lender's winning bid. In addition to the purchase price, 340 Blue Sky has agreed to pay up to $4,804,648.01 in seller closing costs. In support of the offer, 340 Blue Sky has transferred $5.25 million to its counsel to be held in escrow and has presented proof of funds to close.
The offer also includes a $750,000 payment to the auction house, Concierge Auctions, representing the amount the auctioneer would have earned from the winning bid. The movant characterizes this as eliminating any argument that overturning the auction result would prejudice the auctioneer, noting that the net effect would be that the estate receives more while the auctioneer is made whole.
Key Terms of the Purchase Agreement
The Purchase and Sale Agreement, dated February 18, 2026, contains the following material terms:
The purchase price of $107 million is structured as an all-cash transaction with no financing contingency. The closing is scheduled for the later of 11 days after entry of a sale order by the bankruptcy court or 45 days after the effective date, with an outside closing date of April 7, 2026. The purchaser has a one-time option to extend the closing by 30 days by depositing an additional $5.25 million in escrow.
The property is being sold on an as-is basis with all faults. The seller is required to wind down the hotel business prior to closing, including terminating the hotel management agreement, canceling all contracts and licenses, removing all Holiday Inn identification, and terminating employees and vendors in compliance with applicable laws, including any WARN Act requirements.
The agreement contemplates that the property will be transferred pursuant to a plan of reorganization under Section 1129 of the Bankruptcy Code, with the provisions of Section 1146(a) applying to the transfer for tax benefits. The sale would be free and clear of all liens, claims, interests, and encumbrances, with valid liens attaching to proceeds in the same order and priority.
Closing Cost Breakdown
The $4,804,648.01 in seller closing costs that the purchaser has agreed to pay includes a 2% broker commission of $2,140,000 to the seller's broker, a $750,000 flat fee to Concierge Auctions, $597,151.05 in outstanding real estate taxes, $11,666.96 in outstanding tangible property taxes, $1,300,000 for payment to creditors and legal fees, and approximately $5,830 in title searches, lien searches, recording fees, and closing agent costs. The closing cost cap is separate from and in addition to the purchase price.
Legal Arguments for Approval
The motion asserts that 340 Blue Sky has standing to challenge the auction as an unsuccessful bidder, citing federal court precedent recognizing that even unsuccessful bidders may challenge the inherent fairness or intrinsic structure of a bankruptcy sale. The movant argues that Section 363(b) of the Bankruptcy Code authorizes the sale of estate property outside the ordinary course of business upon court approval, and Section 363(f) permits such sales free and clear of interests under applicable conditions.
The filing contends that the court should approve the offer because it represents the highest and best offer for the property and because the debtor has been unable to reach an agreement with the lender for the purchase. The motion characterizes 340 Blue Sky as a good-faith purchaser acting at arm's length and states that it is prepared to demonstrate its financial ability to close on an expedited basis. The movant requests that the court schedule a hearing on the motion.
Default Provisions
Under the agreement, if the purchaser defaults and fails to cure within five days of notice, the seller's sole remedy is termination and retention of the deposit as liquidated damages. If the seller defaults after entry of the sale order, the purchaser may either terminate and receive a return of its deposit plus up to $25,000 in out-of-pocket expenses, or seek specific performance limited to compelling conveyance of the property. The purchaser has irrevocably waived any right to monetary damages against the seller.
Case Information
Court: United States Bankruptcy Court, Southern District of Florida, Miami Division
Case Number: 24-23028-LMI (Jointly Administered)
Debtor Entities:
- BH Downtown Miami, LLC
- 340 Biscayne Owner LLC
Property Address: 340 Biscayne Boulevard, Miami, Florida 33132 (Folio #01-0108-030-1010)
Docket Number: 374
Filing Date: February 19, 2026
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 37-page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.