Westport development saga to continue in bankruptcy court

Foreclosure at issue as parties continue discussions

(Kim Hairston / Baltimore…)
September 08, 2014|By Arthur Hirsch, The Baltimore Sun

Developer Patrick Turner again put off possible foreclosure on the South Baltimore waterfront he wants to redevelop as the parties agreed Monday in backruptcy court to an Oct. 24 hearing on all matters in the case.

The delay gives Turner's Inner Harbor West LLC another month or so to attempt to come to terms with creditor Westport Property Investments LLC, which had asked the court to lift the automatic stay triggered by the bankruptcy that blocks foreclosure.

If Turner and his creditors don't reach agreement before then, Judge Robert A. Gordon could be asked to decide the fate of Turner's aspiration to turn 43 acres on the Patapsco River into a project including homes, stores, hotels, a high-rise building and a park.

Matthew G. Summers, the lawyer representing Westport Property, told the judge that his clients will continue discussions with Turner's company. Gordon said he would plan on the hearing even with the discussions going on.

Phil Anderson, a lawyer representing Inner Harbor West in court, said he was making the appearance for the lawyer from Jeffrey M. Sirody & Associates who is handling the case, and was not able to comment.

In court papers filed last week, Inner Harbor West accused Westport Property of failing to respond to several of its proposals to resolve the dispute, and not making clear who is behind the company.

Westport's lawyer "has refused to identify the individuals who own or control investments," Inner Harbor West argued. That refusal interferes with the company's ability to act in its own best interest in the dispute, the lawyer argued in asking that the automatic stay of foreclosure not be lifted.

Shortly before a scheduled foreclosure auction last year, creditors filed an involuntary bankruptcy petition against Inner Harbor West, triggering the automatic stay.

Inner Harbor West also argues that Citigroup Global Markets Realty Corp., which held the note originally and sold it to Westport, "expressly refused to negotiate with or entertain any proposal" from Inner Harbor West to acquire the loan.

In arguing in the spring that the court lift an automatic stay to allow foreclosure, Citigroup said that Inner Harbor West owed $32 million on a loan due in August 2010. Citigroup argued that there are several grounds for lifting the stay, including the debtor's failure to may payments since July 2010, and that Citigroup's lien "great exceeds" the property's value.

Inner Harbor West denies that no payments have been made since July 2010 and argues that Citigroup did not have grounds for relief from the stay.

The current Chapter 11 bankruptcy case involving Inner Harbor West LLC is what remains after about four years of dispute among several parties and partners over Turner's ambitious waterfront plan, including a 65-story building, which was first unveiled to local residents in 2006. The first buildings were to open in 2008.

That year, the City Council and then-Mayor Sheila Dixon approved $160 million in bonds to pay for utility work, including roads, sewer and water lines, at the site. It was the largest deal of its kind approved by the city up to that point.

Recession took its toll on the effort, however, and Turner's group fell behind in payments to creditors. In the current bankruptcy case — remaining after another was dismissed this summer — Westport Property Investments is asking the court to lift an automatic stay that would allow it to pursue foreclosure.

Kenneth Frank, a lawyer representing several creditors in the case, including Tiderock Capital LLC, was not in court, but later said he hoped the parties could settle the matter among themselves and take their agreement to Judge Gordon for his approval.

"It's always better if the parties can take care of their own business," Frank said.

arthur.hirsch@baltsun.com

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