After nearly five years of wrangling, Bank of America and Charlotte real estate firm American Asset Corp. have settled a dispute over $130 million in construction loans on properties in Charlotte and Raleigh.
AAC develops and manages retail, office and industrial space on behalf of investors, and now has a portfolio of about 6 million square feet across the Southeast. The conflict with Bank of America involved 10 of those properties, including the Whitehall Corporate Center and Shopton Ridge Industrial Center in southwest Charlotte.
The financial crisis hit in the middle of a number of development projects, just as the real estate groups loans were due to be renegotiated. AAC claimed that Bank of America did not fulfill its obligations to fund the money it needed to bring in tenants and stabilize the projects.
Bank of America claimed AAC was in default on its loans and failed to turn over lease payments. The bank began foreclosing on several of the properties. AAC ultimately sued to hold off the foreclosures and prevent the bank from selling the loans.
Under the agreement reached this week, Bank of America has issued new five-year loans on the properties, essentially returning them to a normal environment, AAC said.
Were satisfied that weve gotten to a very positive solution, AAC president Paul Herndon said. It was a crazy few years, the past few years, for most everyone. Unfortunately, at times you have to use the legal process to put things back together. We got it accomplished, and it ended up being consensual at the end.
Bank of America confirmed that the litigation had been dismissed, but declined further comment.
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