A developers closing down of a failed construction project can lead to severe consequences, New York Real Estate Journal

By Andrew L. Richards
(November 13, 2012)

Developers often create separate entities (usually limited liability companies) to own the land upon which a project is located in order to protect assets of their main corporate entities in the event that a particular project fails or sustains significant financial losses. A common practice of developers in cases of a project gone bad is to simply walk away from the project, and the debts incurred by project-specific entity. Some developers will go as far as to place the entity into bankruptcy.