Uptown 240 is a partially built condo complex at 240 Lake Dillon Drive in Dillon. (Hilco Real Estate/Vimeo)
With just two weeks remaining before they must pay out millions of dollars, owners of a bankrupt unfinished condo project in Summit County have failed to find a suitable buyer.
“We wish that we were here today with a bid in hand that would have paid everybody in full,” lawyer Keri Riley told a court Tuesday. “Unfortunately, that is not where we are.”
Riley represents Uptown 240, a long-stalled, 80-unit development in the heart of Dillon. Her clients, the novice developers Danilo and Chantelle Ottoborgo, have failed to build the complex in the four years since they broke ground. It went bankrupt in February.
Uptown 240 owes about $14 million to so-called “secured creditors,” like Michigan developer Porritt Group, which holds $9.3 million of its debt, and contractors that haven’t been paid. It owes another $6 million to people who made down payments for condos there.
In an attempt to pay off its largest secured creditors ahead of an Oct. 18 deadline, and maybe have some money left over for condo buyers, Uptown 240 solicited bids. Hilco, which valued the property at $30 million, posted ads in The Wall Street Journal and elsewhere.
“We had over 125 NDAs that were signed … we had multiple site visits from a number of interested parties, and ultimately that did culminate in some offers for the purchase of the property,” Riley told U.S. Bankruptcy Judge Thomas McNamara this week.
“There were only two qualified bidders, is that right?” the judge asked her.
“Correct.”
“And both of the amounts that were offered were below the amount needed to pay the secured debt?”
“Unfortunately, yes,” Riley said.
The former developers of Uptown 240, at 240 Lake Dillon Drive in Dillon, say the project is 35 percent complete. (Hilco Real Estate/Vimeo)
The highest offer, $12.75 million, came from 240 Lake Dillon Drive Developer LLC, according to Riley. State records show the LLC was created Aug. 15 by Matthew Bender, a real estate attorney with Otten Johnson Robinson Neff & Ragonetti. He did not respond to requests to name his client or discuss that client’s plans for the project.
The low quantity and quality of the bids were met with disappointment in court Tuesday.
“It seems like this case is in a pretty precarious spot,” said Ben Sales with the U.S. Trustee’s Office, which monitors bankruptcy cases on behalf of the government.
“I am not optimistic that we will get anything done,” said Paul Urtz, lawyer for Porritt Group.
Gabrielle Palmer, an attorney representing condo buyers, was slightly more positive.
“We’re obviously really disappointed in the auction process and the bids that were received,” she said, “but from our perspective, there is still the potential for a deal to be had.”
Not only were the offers lower than anticipated but 240 Lake Dillon Drive Developer LLC also wants 75 days to close on the sale — far too long if Uptown 240 is to meet its Oct. 18 deadline for repaying secured creditors. Riley hopes to renegotiate that deadline.
“A sale is going to be better for the secured creditors as well because it will alleviate the need for a lot of litigation in state court that would follow a foreclosure,” she said.
But Urtz cast doubt on his client’s willingness to renegotiate, saying that Porritt Group will likely move to foreclose on the property “if funding isn’t there by Oct. 18.”
“That’s not to say that something couldn’t change in the next few days. That’s always a possibility,” he told McNamara. “But at this point, I am less optimistic.”
Uptown 240 is a partially built condo complex at 240 Lake Dillon Drive in Dillon. (Hilco Real Estate/Vimeo)
With just two weeks remaining before they must pay out millions of dollars, owners of a bankrupt unfinished condo project in Summit County have failed to find a suitable buyer.
“We wish that we were here today with a bid in hand that would have paid everybody in full,” lawyer Keri Riley told a court Tuesday. “Unfortunately, that is not where we are.”
Riley represents Uptown 240, a long-stalled, 80-unit development in the heart of Dillon. Her clients, the novice developers Danilo and Chantelle Ottoborgo, have failed to build the complex in the four years since they broke ground. It went bankrupt in February.
Uptown 240 owes about $14 million to so-called “secured creditors,” like Michigan developer Porritt Group, which holds $9.3 million of its debt, and contractors that haven’t been paid. It owes another $6 million to people who made down payments for condos there.
In an attempt to pay off its largest secured creditors ahead of an Oct. 18 deadline, and maybe have some money left over for condo buyers, Uptown 240 solicited bids. Hilco, which valued the property at $30 million, posted ads in The Wall Street Journal and elsewhere.
“We had over 125 NDAs that were signed … we had multiple site visits from a number of interested parties, and ultimately that did culminate in some offers for the purchase of the property,” Riley told U.S. Bankruptcy Judge Thomas McNamara this week.
“There were only two qualified bidders, is that right?” the judge asked her.
“Correct.”
“And both of the amounts that were offered were below the amount needed to pay the secured debt?”
“Unfortunately, yes,” Riley said.
The former developers of Uptown 240, at 240 Lake Dillon Drive in Dillon, say the project is 35 percent complete. (Hilco Real Estate/Vimeo)
The highest offer, $12.75 million, came from 240 Lake Dillon Drive Developer LLC, according to Riley. State records show the LLC was created Aug. 15 by Matthew Bender, a real estate attorney with Otten Johnson Robinson Neff & Ragonetti. He did not respond to requests to name his client or discuss that client’s plans for the project.
The low quantity and quality of the bids were met with disappointment in court Tuesday.
“It seems like this case is in a pretty precarious spot,” said Ben Sales with the U.S. Trustee’s Office, which monitors bankruptcy cases on behalf of the government.
“I am not optimistic that we will get anything done,” said Paul Urtz, lawyer for Porritt Group.
Gabrielle Palmer, an attorney representing condo buyers, was slightly more positive.
“We’re obviously really disappointed in the auction process and the bids that were received,” she said, “but from our perspective, there is still the potential for a deal to be had.”
Not only were the offers lower than anticipated but 240 Lake Dillon Drive Developer LLC also wants 75 days to close on the sale — far too long if Uptown 240 is to meet its Oct. 18 deadline for repaying secured creditors. Riley hopes to renegotiate that deadline.
“A sale is going to be better for the secured creditors as well because it will alleviate the need for a lot of litigation in state court that would follow a foreclosure,” she said.
But Urtz cast doubt on his client’s willingness to renegotiate, saying that Porritt Group will likely move to foreclose on the property “if funding isn’t there by Oct. 18.”
“That’s not to say that something couldn’t change in the next few days. That’s always a possibility,” he told McNamara. “But at this point, I am less optimistic.”
