“We are doing everything possible to save these buildings for our clients,” said Jack Rose, Chief Strategist.
Santa Ana, CA (PRWEB) August 12, 2013
Judge Theodore C. Albert of the U.S. Bankruptcy Court of the Central District of California has voided the illegal foreclosure of two Atlanta area office buildings (Case No. 8:12-bk-24593-TA). According to court documents, the lender’s servicer, LNR Partners, purportedly foreclosed on the two office buildings while they were under the protection of the automatic stay provisions of the U.S. Bankruptcy Code. LNR knowingly failed to seek relief from the automatic stay in the Bankruptcy Court, and violated the automatic stay under Section 362 of the Bankruptcy Code when it attempted to foreclose on the buildings. The two office buildings, known as Parkway 400, are owned by 35 tenant-in-common owners and located in Alpharetta, Georgia.
“LNR is not above the law,” said tenant-in-common owner Ralph Farinas. “Fortunately, the Court ruled in our favor. Many of the Parkway 400 investors are elderly and devoted a large portion of their life savings into these buildings. We are determined to not let anyone deprive us of our retirement.”
The 35 tenant-in-common owners purchased the buildings at 11800 Amber Park Drive and 11720 Amber Park Drive in 2007 after being told that the occupancy at Parkway 400 would remain stable and produce steady revenue because Prospect Park, a new $700MM development, was under construction nearby. The new project promised to attract new, quality tenants and artificially inflated the purchase price of Parkway 400. Breakwater alleges that in reality, the Prospect Park project was in bankruptcy and the plans had already been scrapped.
When the recession hit, occupancy at Parkway 400 plummeted and the decreased revenue was insufficient to cover the inflated loan payments. The owners hired Breakwater to protect the property from foreclosure and negotiate a debt restructuring. According to the complaint, LNR refused to negotiate so one of the tenant-in-common entities filed bankruptcy, placing the property under protection of the automatic stay. According to court documents, LNR chose to ignore the automatic stay and moved to foreclose on the remaining tenant-in-common entities.
“This is not the first time that a lender has attempted to deprive owners of their property by disregarding the rules,” said Phil Jemmett, Breakwater CEO. “We know of at least four other properties where a lender has done the same thing. This latest action is part of an overall pattern and practice. These tenant-in-common investors are very vulnerable and lenders should not try to take advantage of them.”
“We are doing everything possible to save these buildings for our clients,” said Jack Rose, Chief Strategist. “We believe the owners are entitled to a fair opportunity to reorganize under Chapter 11."
About Breakwater Equity Partners
Breakwater Equity Partners is a San Diego-based commercial real estate workout consultancy 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 uncovering and resolving distressed assets. Breakwater’s professional team combines legal, financial, economic, banking, 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). For more information on Breakwater Equity Partners, please call 858-490-3630 or visit http://www.breakwaterequity.com.