## Facts

- Wansdown Properties Corporation N.V. (Wansdown) owned a Manhattan townhouse and was involved in a Chapter 11 bankruptcy proceeding.
- Wansdown agreed to sell the townhouse to 29 Beekman Corp. (Beekman) under a purchase agreement connected to the bankruptcy case.
- Beekman paid a substantial down payment under the contract.
- The contract included a condition precedent tied to a “Proceeds Representation”: Wansdown represented that the net sale proceeds would be sufficient to satisfy all claims against Wansdown’s bankruptcy estate, and the representation had to be true at closing to require Beekman to close.
- As the scheduled closing approached, it became apparent that Wansdown could not proceed with the closing as originally planned.
- Although the contract allowed alternate methods for closing outside the bankruptcy-court-approved process, Beekman backed out of the transaction before closing, which Wansdown treated as an anticipatory breach.
- The purchase agreement contained a liquidated-damages clause providing that if Beekman defaulted, Wansdown’s remedy was retention of the down payment.
- Wansdown later sold the townhouse to a different purchaser at a higher price than Beekman had agreed to pay.
- Wansdown filed an adversary complaint seeking a determination that it was entitled to keep Beekman’s down payment.
- On cross-motions for summary judgment, the bankruptcy court denied relief to both sides, citing factual disputes that affected whether Beekman’s performance was excused by the proceeds-condition issue.
- Beekman moved for reconsideration, focusing on the court’s discussion of whether excusing the condition was appropriate to avoid a disproportionate forfeiture to Wansdown.

## Issues

1. Whether the court should reconsider and revise its analysis of “disproportionate forfeiture” in evaluating whether the nonoccurrence of the proceeds-related condition could be excused.
2. Whether, on the existing record, the proceeds-related condition must be enforced strictly as a matter of law, thereby excusing Beekman’s nonperformance and defeating Wansdown’s claim to the down payment.
3. Whether the case could be resolved on summary judgment or whether fact disputes (including the meaning and application of the proceeds-related representation and the significance of forfeiture) required trial.

## Decision

- The court granted Beekman’s motion for reconsideration in part and denied it in part.
- The court revisited and refined its earlier discussion of the disproportionate-forfeiture question in connection with the proceeds-condition analysis.
- The court did not convert reconsideration into summary judgment for either party; the prior denial of both sides’ summary-judgment motions effectively remained in place.
- The court left for trial fact questions bearing on the condition precedent, the consequences of enforcing or excusing it, and entitlement to the down payment under the contract’s liquidated-damages framework.

## Legal Principles

- A court may reconsider an interlocutory ruling to correct errors in analysis or to clarify reasoning, but reconsideration does not replace trial when material fact disputes remain.
- Under New York contract law, a condition precedent to performance must generally occur before the counterparty’s duty to perform arises; if the condition does not occur, performance may be excused.
- A court may excuse the nonoccurrence of a condition to prevent a disproportionate forfeiture where the condition is not a material part of the exchange (reflecting Restatement (Second) of Contracts § 229 principles).
- Whether excusing a condition would avoid a disproportionate forfeiture, and whether the condition was material, commonly turns on the facts, including the role of a down payment and the effect of the parties’ conduct on the loss claimed.
- Post-breach events such as a later resale at a higher price may bear on the forfeiture analysis, but they do not, by themselves, resolve whether the condition should be excused or who is entitled to the down payment.

## Conclusion

In *In re Wansdown Properties Corporation N.V.*, the bankruptcy court partially granted reconsideration to refine its summary-judgment reasoning about whether a sale-proceeds condition could be excused to prevent a disproportionate forfeiture of the buyer’s down payment, but it left the core contract and forfeiture disputes for trial because key factual questions remained unresolved.


In re Wansdown Properties Corporation N.V., 626 B.R. 165 (2021)