Tampa, FL (PRWEB) October 21, 2013
Breakwater Equity Partners, a commercial loan advisory and restructuring firm, announced today that the Second District Court of Appeal has unanimously overturned the judgment of foreclosure on the Beaumont Business Center (Case No. 2D12-5873). The foreclosure by the special servicer for the lender, ORIX, is now void.
“This has been a difficult process for all of the investors, but especially for the investors who are depending on the property to help fund their retirement,” said Mark Fackler, a member of the Beaumont Steering Committee. “We are delighted that the appeals court has agreed with what we’ve been saying all along. We are glad to get our property back and look forward to the opportunity to restructure our investment.”
“The court documents revealed that after the purported foreclosure, ORIX sold the property to a third party buyer, who will now have to give it back to the rightful owners,” said Phil Jemmett, CEO of Breakwater. “Unfortunately, this type of lender behavior is all too common. We are looking forward to discovering how the property was managed after the wrongful foreclosure.”
The eleven building, 252,818 square-foot property was purchased by 25 tenant-in-common investors for $21.3MM in 2004. According to court documents many of the owners are senior citizens who were looking for a safe place to generate income for their retirement. Some of the investors sank their life savings into the property.
According to the court's ruling, the special servicer for the lender, ORIX, began the foreclosure action against the owners despite knowing that there were two versions of the loan documents. As the dispute progressed, the owners discovered for the first time that the original loan documents included two different promissory notes with two different maturity dates. The foreclosure action placed a stigma on the property that the owners could not overcome; prospective and current tenants became leery of the property. ORIX refused to work with the owners or acknowledge the existence of the two versions of the loan agreements.
“We are pleased that the appeals court held the special servicer accountable," said Jack Rose, Chief Strategist for Breakwater. "ORIX should have checked the maturity dates on the promissory notes before starting foreclosure. We believe that when ORIX found out that it had made a mistake, ORIX should have come clean and worked with the borrower to repair the damage it created."
Richard Schlosser of the law firm of Bricklemyer, Smolker & Bolves, PA in Tampa, FL represented the tenant-in-common owners.
About Breakwater Equity Partners
Breakwater Equity Partners is a San Diego-based commercial real estate advisory, restructuring and investment firm. Through Breakwater’s extensive experience on over 200 engagements with loan values in excess of a $3B, the firm has devised a unique, multidisciplinary approach to analyzing and optimizing commercial assets. Breakwater’s professional team combines legal, financial, economic, lender, tax, and regulatory expertise to devise customized strategies for each property regardless of market (primary to tertiary), asset class (office, retail, multi-family, industrial, flex, land), loan type (portfolio or CMBS) or circumstance (performing or non-performing).