[Source: Arizona Republic from U.S. Bankruptcy Court records] — Bankrupt construction lender Mortgages Ltd. has reached settlements with seven developers that account for more than one-half the company’s $925 million loan portfolio. Under the agreements, Mortgages Ltd. will subordinate investor interest, find additional capital for certain borrowers, and reduce interest rates for others. The borrowers agree to drop pending lawsuits against the company.
- SOJAC I LLC — Proposed Jackson Street Entertainment District in downtown Phoenix.
- MK Custom Residential Construction LLC — Various condo projects in central Phoenix.
- Grace Communities — Hotel Monroe in downtown Phoenix, X Wine Lofts in Scottsdale, and others.
- University & Ash LLC, Roosevelt Gateway LLC, Roosevelt Gateway II LLC — Various proposed condo developments in Phoenix and Tempe.
- Rightpath Ltd. Development Group LLC — Main Street Glendale near University of Phoenix Stadium.
- Avenue Communities LLC — Centerpoint Condominiums in Tempe
- Bisontown LLC — Residential communities.
[Source: Andrew Johnson, Arizona Republic] — Bankrupt real-estate lender Mortgages Ltd. plans to begin foreclosing on properties being developed by two of its largest borrowers. John Clemency, an attorney representing Mortgages Ltd., said in U.S. Bankruptcy Court on Monday that the company plans to take action against Grace Communities and Rightpath Ltd. Development Group LLC. Mortgages Ltd. claims the borrowers are in default on loan payments.
Grace has five loans from Mortgages Ltd., including ones for the construction of Hotel Monroe in downtown Phoenix and X Wine Lofts near downtown Scottsdale. Rightpath has three loans from Mortgages Ltd. for the development of Main Street Glendale, a mixed-use sports and entertainment project on 500 acres near University of Phoenix Stadium. Both companies deny being in default and are suing Mortgages Ltd. in Maricopa County Superior Court. They allege in separate lawsuits that the lender did not fully fund their loans. [Note: To read the full article, click here.]
[Source: Andrew Johnson, Arizona Republic] — Developers worried about Mortgages Ltd.’s dwindling assets asked the U.S. Bankruptcy Court on Monday to convert the real-estate lender’s Chapter 11 bankruptcy case to a Chapter 7. The change would significantly affect the Phoenix-based company, other borrowers and the company’s nearly 3,000 investors. Specifically, Chapter 7 proceedings would halt the Phoenix-based firm’s efforts to obtain interim financing for stalled projects while in bankruptcy.
Mortgages Ltd. has been meeting with other lenders, seeking money to pay for business expenses and continue funding unfinished developments such as Hotel Monroe in downtown Phoenix, [Chateaux on Central in midtown Phoenix,] and the Centerpoint condo towers in downtown Tempe.
The motion filed Monday came from Rightpath Limited Development Group LLC, one of several borrowers that claim Mortgages Ltd. did not fully fund its loans. Scottsdale-based Rightpath is developing a spring-training and entertainment facility in Glendale. Its motion asksthe court to convert the Mortgages Ltd. bankruptcy case from Chapter 11 to Chapter 7. [Note: To read the full article, click here.]