You have done this.I am no lawyer but I fail to see how the buyer and his agent can hold you liable for performance unless there was language in the accepted offer that held you responsible for curing any deficiencies discovered. 

The other 50% lose their filing fees and start over, but even then tenants most likely pay-up immediately or else you can correct the paperwork or other deficiency and re-do the eviction...only rarely does a defense and counterclaim get raised that cleans your clock, and then you'll wish you had an attorney.  

I would expect that he would play games and expect big discounts after the inspection finds dozens of deficiencies. 

Bet he has tax problems too.As mentioned, the numbers suggested aren't in reality.He doesn't get the appraisal, the lender does, but he pays for it, no serious lender loans money on what some borrower obtains.Yes, the can foreclose and then seek a deficiency judgment, being a commercial loan, then go after the LLC, then drill right through his under capitalized LLC and get to him personally.

I would respectfully request you to believe that a decade old, high-growth company of this scale may not have a deficient product or be “blatantly bad for their customer base.”

I should have phrased the beginning of my argument stating,"It's seem highly unlikely, but I would need to read your policy to make the determination"It obvious from your statements above you did not just make an assumption, but did your due diligence with several agents to confirm your understanding of your coverage.Thanks to @Derek Lacy I think he meets us in the middle stating there is some coverage, but coverage that has deficiencies.

Pay attention to and look for - Value Deficiencies, (those item that need attention, windows, kitchen, baths, water stains, cobwebs in basement, low water pressure, ghost doors, these things are useful when estimating value and final offer) Be informed, with pointed questions, the answers could be valuable.

NC allows deficiency judgments in any financing situation we would likely be in.

There are couple of credit card judgements that will be wiped out due to foreclosure deficiency ..in other words there should be no title problems …now what about the actual possession :So far I have established a civilized relationship with owners.

Unless you can prove that the tenant was negligent then assume your property was deficient.