The owners of the Packard Place entrepreneurial hub in uptown and other parties have agreed to a $570,000 settlement to resolve lawsuits filed as part of a complex bankruptcy case, according to court documents filed this week in Charlotte.
In 2012, Redf Marketing, owned by Dan and Sara Roselli, filed for Chapter 11 bankruptcy protection after it was the subject of a $4.2 million legal judgment. As part of that case, a trustee liquidating the company alleged the Rosellis improperly transferred $1.3 million from Redf in order to buy the Packard Place building in 2010, according to documents in U.S. bankruptcy court.
Since its purchase by the Rosellis, Packard Place, a former car dealership known for its distinctive white-and-black paint scheme, has become a fixture on Charlotte’s start-up scene, housing business incubators and co-working space.
In an effort to recoup more money for Redf’s creditors, the bankruptcy trustee in 2014 filed lawsuits against the entities that sold the Packard Place property to the Rosellis – 222 S. Church Street LLC and Novare Group Holdings LLC – and Fifth Third Bank, which received payments from the sale. The trustee also sued Mecklenburg County, which received tax payments, and Vision Brokerage Group, the broker in the transaction.
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The Rosellis were not sued by the trustee.
In the settlement, South Church, Novare and Fifth Third are to make a cash payment totaling $270,000 to the bankruptcy estate, while the Rosellis are to pay $120,000. In addition, the Rosellis will agree to pay another $150,000 by March 31, 2017.
Vision is also paying $25,000 and Mecklenburg County $5,000, according to court documents.
In a court filing Monday, the trustee, Elaine Rudisill, asked the bankruptcy court to approve the settlement, which was reached in August. A hearing has been scheduled for Nov. 29.
Dan Roselli in an email Friday said: “These are lawsuits against the people who sold us the building, not against Packard Place which has done nothing wrong. Packard Place has never been sued by the trustee for any reason.” The other parties did not respond to a request for comment.
In March, Roselli said Packard Place has “millions of dollars of positive equity in the building and continues to be a strong business model,” adding: “Current litigation, no matter the outcome, does not jeopardize the company.”
In court filings, the trustee said the defendants had vigorously defended themselves and that continuing the case would incur “significant costs.”