“This has been a long struggle, but we are delighted to finally obtain justice for the small investors who were completely unaware of the structural problems with the building,” said Phil Jemmett, CEO of Breakwater Equity.
San Diego, CA (PRWEB) December 28, 2011
Breakwater Equity Partners, a consulting firm specializing in commercial loan workouts, announced today its completion of a multi-million dollar settlement with Grubb & Ellis Inc., a leading real estate company, and Lexington Insurance over the Met Center 10 property in Austin, Texas.1 After uncovering an alleged undisclosed structural flaw in the 345,000-square-foot office building, the owners and Breakwater Equity pursued legal action against Grubb & Ellis, its insurers, and other parties to achieve the settlement on behalf of the tenants-in-common investors (TIC). Proceeds from the $7.785 million settlement are earmarked to repair the property and restructure the loan.1, 2
In addition to the initial settlement, the investors anticipate achieving settlements for an additional $1.5 million with various developers, lawyers, builders, engineers and other parties. These pending settlements are anticipated to close in January 2012.3, 4
“Breakwater Equity has been fighting hard on behalf of the investors to save their investment and resolve issues in the Met Center 10 building,” said Phil Jemmett, CEO of Breakwater Equity. “This has been a long struggle, but we are delighted to finally obtain justice for the small investors who were completely unaware of the structural problems with the building.”
The Met Center 10 tenants include PPD, a leading global contract research organization in the pharmaceutical industry, and the Texas Department of Insurance.
“We never anticipated fraud and legal malpractice when we first invested in the Met Center 10 office building. Through the efforts of Breakwater and our legal team, we saved our investment,” said Sam Brenner, Chairman of the TIC Steering Committee. “Without their technical expertise and negotiation skills, the investors would be in a terrible financial situation. Breakwater fought a long and contentious battle to protect our rights. Were it not for Breakwater, we would have surely lost the building to foreclosure.”
Breakwater Equity, alongside litigation attorneys Hull Hendricks and O’Melveny & Myers, pursued legal action against Grubb & Ellis for allegedly misrepresenting the property by failing to disclose a structural issue with the building.1
“We could not have achieved this settlement without the persistence, creativity, and skills of our legal team: Hull Hendricks and O’Melveny & Myers,” said Jemmett. “This has been a very complex case, and we owe our success to the dedicated legal team who worked diligently to help serve the investors.”
Breakwater Equity specializes in commercial loan workouts, and has over 200 commercial loan engagements completed or in progress. Armed with a team of legal, financial, economic, banking and real estate experts, Breakwater Equity offers a unique, multidisciplinary approach to loan modifications.
1. NNN Met Center 10 1, LLC, et al. v Grubb & Ellis Realty Investors; American Arbitration No. 73 115 Y 00140 10 HLT. An arbitration seeking damages against Grubb and Ellis Realty Investments for fraud and other misconduct relating to the sale of the Met Center Property to the Debtor, misappropriation of Property monies, and in the management of the Property.
2. Bankruptcy No. 11-30356 TEC.
3. Met Center, 10, LLC, et al. v. Met Center Partners-6, Ltd , et al., No. D-1-GN-08-002104 (261st District Ct., Travis County, Tex.). Lawsuit against architects (Susman Tisdale Gayle Architects, Inc., Studio 8 Architects, Milton Hime and Lisa Dambold), engineers (Reed Engineernig Group, Ltd. And Ronald F. Reed, Bihner Engineering, Inc. and Brad Bihner, due to diligence company (AES Due Diligence, Inc.), and construction company (Raymond Construction Co., Inc.) relating to damage of the Property.
4. NNN Met Center, 10-1, LLC, et al. v. Krugman, Biller and Reed Smith, et al., No. D-1_GN-10-004495 (353rd District Ct., Travis County Tex.). Lawsuit against attorneys who represented Debtor in litigation regarding Property (Kimberly Krugman, Andrea Biller, John Vishneski, Reed Smith LLP) and potential claims against Blair Dancy and Van Osselear Buchanan, LLP.
About Breakwater Equity Partners
Breakwater Equity Partners is a privately-owned real estate consulting firm located in San Diego, CA, providing commercial loan workout strategies and negotiation services to property owners and investors throughout the U.S. The Breakwater team, consisting of experts in finance, banking, real estate and law, has worked on over 200 commercial loan workouts throughout the US, with deep experience in a wide variety of real estate asset classes, including office, industrial, retail, multi-family, mixed use, master-planned communities, residential and land development, golf courses, and farming operations. Breakwater also specializes in Tenant-in-Common loan workouts. For more information on Breakwater Equity Partners, please call 858-490-3630 or visit http://www.breakwaterequity.com.
Contact: Melissa Marasco
Telephone: (855) 438-3553