Three contractors have forced The Park condos' developer into bankruptcy court, a move that temporarily halts foreclosure proceedings and could open the door to another bidder for the high-profile uptown project.
C.P. Buckner Steel Erection Inc., Southern Steel Co. LLC and architect Gary Williams filed the Chapter 7 petition Thursday in U.S. Bankruptcy Court against condo developer 222 South Caldwell Street Ltd. Partnership, an arm of Verna & Associates of Charlotte.
While most businesses in bankruptcy court file on their own, creditors can initiate an involuntary bankruptcy against almost any company that owes them money. Forcing a company into court can keep a debtor from burning through all its assets before it files for bankruptcy protection on its own.
In this case, the creditors say they are owed more than $1.8 million, according to the court filing. They filed the petition because the foreclosure would have likely wiped away those debts, their attorneys said.
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“It appeared clear that a number of businesses and individuals who had worked hard to provide materials and labor to the project were unpaid …” said attorney Kevin Sink of Nicholls & Crampton in Raleigh in an e-mailed statement. “We believe that the bankruptcy proceeding will provide a better opportunity to maximize the value of the project, which will benefit all outstanding creditors.”
Carl Felson of Verna & Associates declined to comment Tuesday.
The step is the latest twist to The Park saga. The 21-story condo tower at Caldwell and Third streets uptown went into foreclosure last month. After a bidding period, a company called Summitt Shores had registered the highest bid, $18.8 million.
The high-profile condo tower's difficulties highlight the troubles hitting uptown's once-hot condo market. The slowing economy and credit crunch have made it more difficult to get loans, and rising construction costs have made projects more expensive to build.
210 Trade, the condo tower going up at the EpiCentre, has been stalled since February in a legal dispute between its developer and the EpiCentre's. Two other projects, One Charlotte and 300 South Tryon, have been postponed this year.
Little is known about Summitt Shores, the high bidder on The Park. Its owner is Leonard Ray Watts, according to a news release on The Park's Web site.
Watts, who did not return phone calls Tuesday, was listed with the N.C. Secretary of State's office as the registered agent of several companies. One of them, Apex Homes Inc. of Cornelius, has a history of rescuing troubled developments, according to newspaper articles.
The Anderson (S.C.) Independent-Mail News reported last month that Apex Homes took over a failed multifamily development near Clemson, S.C., in 2007, changed its name and moved forward with construction. The project's first 61 units will be finished by the end of September, the article said.
Summitt Shores' attorney, Carey “Al” Sellers of Charlotte, has declined to comment about the company's plans for The Park.
The bankruptcy petition puts the foreclosure – and Summitt Shores' high bid – on hold, pending orders from the U.S. Bankruptcy Court, trustee Porter Rhoton III said Tuesday. The trustee could seek others willing to bid more for the project.
It has been expected that a developer could buy the project and finish it as planned or for another use, such as an office building.