Bridgewater Living is an unfinished senior housing project in Castle Rock. (Facebook)
The developer of a bankrupt senior housing complex in Castle Rock said that project is nearly complete and should not be sold off or handed over to someone else.
But the bank that oversees the bond-funded project accuses the developer of fraudulently transferring that “deeply underwater” property, taking out “a bogus mortgage” on it and then filing a bad-faith bankruptcy case just to block a receiver from rightly selling it.
“It is in the best interest of all parties to dismiss this case,” UMB Bank said of the Solterra Companies’ Bridgewater Living project, “so that a professional and experienced receiver is empowered to do what (Solterra) has not and cannot: complete and sell it.”
Solterra, an Arizona developer, broke ground in 2021 on the 142-unit complex at 4003 Home St., on a hillside just east of I-25. The project was funded by $38.4 million in bonds from the Douglas County Housing Partnership. UMB Bank was named the project’s trustee.
“The project is approximately 92 percent complete,” Solterra told the U.S. Bankruptcy Court in a legal filing July 15. “(Solterra) anticipates obtaining a certificate of occupancy in August or September of 2024 and completing the project in October or November of 2024.”
“UMB has made clear that it intended to appoint a receiver solely to sell the business, regardless of its use,” the developer went on to say. “(Solterra) is dedicated to providing affordable housing and has filed this case to reorganize to pursue this mission.”
UMB sued Solterra last month and asked that a receiver be appointed, since the project “is in financial freefall” and “hemorrhaging money.” Michael Staheli of Cordes & Company was named its receiver on June 11. Three days later, Solterra declared the project bankrupt.
Bridgewater Living, at 4001 Home St. in Castle Rock, is seen on June 6, 2024. (Facebook)
“The timing demonstrates that the bankruptcy filing was a litigation tactic, rather than a good faith effort…to reorganize its business and finances,” UMB alleges now.
The Kansas City-based bank said that Solterra is trying to “blatantly abuse and impugn the integrity of the bankruptcy system.” It wants Judge Thomas McNamara to either dismiss the bankruptcy or appoint someone to sell Bridgewater. A hearing is set for Aug. 8.
Solterra, meanwhile, said there is no reason to change course when the project is so close to completion and when 33 future tenants have paid deposits. Solterra is seeking financing to finish the project, and promises to sell the property if that doesn’t come through.
Solterra points to a valuation that JLL did in December, which estimates that Bridgewater will be worth $44.4 million when complete and $51.5 million when stable. Since the project is $47 million in debt, that would put the property above water, according to the valuation.
Solterra is represented by the lawyers Patrick Akers and Jordan Helton in the Denver office of Fennemore Craig. UMB’s lawyer is Kyler Burgi at Davis Graham & Stubbs.
Bridgewater Living is an unfinished senior housing project in Castle Rock. (Facebook)
The developer of a bankrupt senior housing complex in Castle Rock said that project is nearly complete and should not be sold off or handed over to someone else.
But the bank that oversees the bond-funded project accuses the developer of fraudulently transferring that “deeply underwater” property, taking out “a bogus mortgage” on it and then filing a bad-faith bankruptcy case just to block a receiver from rightly selling it.
“It is in the best interest of all parties to dismiss this case,” UMB Bank said of the Solterra Companies’ Bridgewater Living project, “so that a professional and experienced receiver is empowered to do what (Solterra) has not and cannot: complete and sell it.”
Solterra, an Arizona developer, broke ground in 2021 on the 142-unit complex at 4003 Home St., on a hillside just east of I-25. The project was funded by $38.4 million in bonds from the Douglas County Housing Partnership. UMB Bank was named the project’s trustee.
“The project is approximately 92 percent complete,” Solterra told the U.S. Bankruptcy Court in a legal filing July 15. “(Solterra) anticipates obtaining a certificate of occupancy in August or September of 2024 and completing the project in October or November of 2024.”
“UMB has made clear that it intended to appoint a receiver solely to sell the business, regardless of its use,” the developer went on to say. “(Solterra) is dedicated to providing affordable housing and has filed this case to reorganize to pursue this mission.”
UMB sued Solterra last month and asked that a receiver be appointed, since the project “is in financial freefall” and “hemorrhaging money.” Michael Staheli of Cordes & Company was named its receiver on June 11. Three days later, Solterra declared the project bankrupt.
Bridgewater Living, at 4001 Home St. in Castle Rock, is seen on June 6, 2024. (Facebook)
“The timing demonstrates that the bankruptcy filing was a litigation tactic, rather than a good faith effort…to reorganize its business and finances,” UMB alleges now.
The Kansas City-based bank said that Solterra is trying to “blatantly abuse and impugn the integrity of the bankruptcy system.” It wants Judge Thomas McNamara to either dismiss the bankruptcy or appoint someone to sell Bridgewater. A hearing is set for Aug. 8.
Solterra, meanwhile, said there is no reason to change course when the project is so close to completion and when 33 future tenants have paid deposits. Solterra is seeking financing to finish the project, and promises to sell the property if that doesn’t come through.
Solterra points to a valuation that JLL did in December, which estimates that Bridgewater will be worth $44.4 million when complete and $51.5 million when stable. Since the project is $47 million in debt, that would put the property above water, according to the valuation.
Solterra is represented by the lawyers Patrick Akers and Jordan Helton in the Denver office of Fennemore Craig. UMB’s lawyer is Kyler Burgi at Davis Graham & Stubbs.
