©2023. Published in Journal of Affordable Housing, Vol. 31, No. 3, February 2023, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
The American Bar Association’s Journal of Affordable Housing and Community Development Law published two articles focused on “Year 15” litigation and property interest transfer rights in the Low-Income Housing Tax Credit (LIHTC) industry in its June 2022 issue.1 Since then, two of the cases discussed therein have changed course, resulting in a dramatic impact on the litigation landscape and on the outcome of several other cases. Additionally, a Delaware Chancery Court has issued an important new decision.
In the first case, commonly known as Pathway, the Sixth Circuit reversed a lower federal district court and preserved a non-profit organization’s Section 42(i)(7) Right of First Refusal (§ 42 ROFR).2 In the second case, commonly known as St. Mary’s, a federal district court in New York State granted reconsideration of its prior decision on an important Year-15 issue, rejecting the notion that capital account balances alter carefully negotiated contract language and issuing a decision in accord with several other similar cases.3 As for the Delaware Chancery Court, in a case commonly known as JER Hudson, this “precedential” decision represents a candid rebuke and detailed analysis of the “Aggregator” problem that threatens the efficacy of the LIHTC program.4 This article discusses these cases.