ALPHARETTA, Ga.--(Breakwater Equity Partners, a commercial real estate consultancy and investment firm, announced that one of the owners of Parkway 400 has filed a motion to hold LNR Partners in contempt (Case 8:12-bk-24593-TA). The motion, now pending before the US Bankruptcy Court in Santa Ana, alleges that LNR Partners, special servicer for the lender on the property, violated the automatic stay which went into effect when the Chapter 11 case was filed on December 31st.)--
“We are confident that the debtor will prevail on this contempt of court motion”
Parkway 400 consists of two office buildings, with a total of 193,218 square feet, in Alpharetta, Georgia. It is owned by 35 tenant-in-common investors from across the United States. Despite the automatic stay, LNR Partners foreclosed against the interests of all of the owners except the debtor that filed Chapter 11. If approved, the motion filed with the bankruptcy court will void the foreclosure and put Parkway 400 back into the hands of the tenant-in-common owners.
“This is an intentional violation of the automatic stay,” said Phil Jemmett, Breakwater CEO. “LNR has repeatedly flouted the automatic stay provisions of the bankruptcy code. We believe that the court should address this ongoing pattern and practice of renegade behavior. The owners of this property are elderly investors who have been defrauded and are now being victimized a second time.”
“LNR’s actions are outrageous,” said Ralph Farinas, one of the tenant-in-common owners. “This is yet another example of the greedy behavior that has become so common with lenders. All we want is an opportunity to save our investment. Most of the investors are depending on this property to provide income for their golden years.”
The 35 tenant-in-common owners purchased Parkway 400 in 2007 for $33.85MM. According to Breakwater Equity Partners, the deal sponsor, Grubb & Ellis, told the mom-and-pop investors that Parkway 400 was a reliable investment that would produce solid dividend distributions. Grubb & Ellis failed to disclose material adverse information related to the investment.
“We are confident that the debtor will prevail on this contempt of court motion,” said Jemmett. “This issue has been litigated in other bankruptcies with LNR and it is clear that the law is well settled. Breakwater is committed to working with vulnerable investors to help protect their interests from predatory lenders.”
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) or loan type (portfolio or CMBS). For more information on Breakwater Equity Partners, please call 858-490-3630 or visit www.breakwaterequity.com.