CHARLESTON, S.C. (WCBD) — A real estate company accused of using cash incentives to lock homeowners into lengthy listing agreements filed a voluntary petition for bankruptcy Friday morning.
MV Realty of South Carolina filed for Chapter 11 Bankruptcy in the South District of Florida.
Chapter 11 bankruptcy is often referred to as a “reorganization” bankruptcy, in which “usually, the debtor remains ‘in possession,’ has the powers and duties of a trustee, and may continue to operate its business, and may, with court approval, borrow new money,” according to uscourts.gov.
According to the court documents, MV Realty of South Carolina’s estimated assets are between $1,000,001 to $10 million, and estimated liabilities are between $10,000,001 to $50 million.
This comes as the company faces lawsuits from attorneys general in multiple states over its Homeowner Benefit Agreement.
In a Count on 2 Investigation earlier this month, a Lowcountry realtor claimed that the agreement took advantage of homeowners who were looking for quick cash during the pandemic.
The company’s website advertises the program, which offers homeowners a cash incentive between $300 to $5,000 “in exchange for the 40-year agreement to use MV Realty as the listing agent if and when they sell their home.”
According to registers of deeds offices, hundreds of homes in Charleston, Berkeley, and Dorchester counties have memorandums on their homes from MV Realty.
Several U.S. Senators also sent a letter to MV Realty on Sept. 7, pressing the company for answers “over allegations of predatory business practices.”