Dallas properties mired in bankruptcy - Washington Business Journal:

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Recent casualties include holdings by West EndSquare Ltd. and West End Parkiny Co., which filed plans to liquidatein U.S. bankruptcgy court last month. About the same time, McKinney Avenued Properties No. 2 Ltd. filed for reorganization protectionj inbankruptcy court. All three entities are owned by Dallas developerAndrew Kasnetz, according to courtr filings. Kasnetz declined to commentt forthis story, but his attorney, Larrt Friedman with Friedman & Feiger LLP, said troubles were sparked by the recession and compounder by his lender’s unwillingness to work with him in restructuring his Park Cities Bank holds the notes on the propertiees — about $7 million for the West End propertiesd and about $11.
5 million for the McKinney Avenue properties, according to court documents. The West End propertiees include avacant 56,500-square-foot buildingy at 804 Pacific Ave., a 20,025-square-foott building at 807 Elm St. and a 6,900-square-foo t parking garage at 801 Elm St. The building reportedly have been vacant for more than a Theparking garage, which has one ground-floo r tenant and space for a second, has been Friedman said. The McKinney Avenue Properties No. 2 Ltd.
includes two 18,000 square feet in the 2500 block of also known asMcKinney Courtyard, which has five vacant spaces and sevehn tenants, including the Uptown Bar & Grill; and 18,50o0 square feet in the 2700 blocki of McKinney, also known as McKinney which has two vacancies and nine including Chipotle restaurant, Friedman said. In bankruptc y court documents, Park Cities Bank claimes that Kasnetz has failed to make loan paymentsdafter Dec. 29, 2008, and didn’gt pay 2008 property taxes. On May 8, Park Citiese Bank posted the propertyfor foreclosure, whicy was automatically delayed when Kasnetz filexd for bankruptcy at the end of May. A hearing is schedulexd for June 29.
“Park Citiesd Bank found themselves at a point in time wherw they hadno alternatives,” said Kenneth Biermacher, an attorneyg with Kane Russell Colemanm & Logan PC who is representin the bank, in an interview. “Theree weren’t any solutions to the problems after monthsx of the noteholders not paying on the Incourt documents, Kasnetz alleged the bank’s attemprt to foreclose is motivated by a desire to profiyt off the sale of the properties, and the issu has become the subject of legal wrangling in Dallas Countyg District Court. Despite negotiations for loan workoutsebetween Jan.
30 and April 1, the bank filecd a notice of default onMarch 30, accordingv to court documents. Park Cities Bank then filed for and receiveds a temporary restraining order seeking to have theMcKinneu properties’ tenants pay rents directly to the according to court documents. Kasnetz, in a written responsew to ParkCities Bank’sx suit and in a counterclaim, accusef the bank of trying to “seize valuable real propertu for less than market and to make a substantial profift by either flipping the propertiea or holding the properties untilp the economy allowed for a sale at a higher price.
” In an interview, Friedman said Park Cities Bank may be steppinf over the line between lender and real estate agent. “Most lenders are not foreclosing on theif realestate loans,” he said. “Nobod y wants vacant real estate, unless there’s real estatwe in hot areas, or soon-to-be hot Biermacher said that Kasnetzis “makinb things up” in his counterclaim “We don’t believe that there is any substance or validity to the Biermacher said in an interview. The bank is not interested in holdinfthe properties, he said, and potential investorse are interested in the vacantr properties.
The West End propertieds wouldbe sold, Biermacher said in an to allow the bank to recover its money. With the McKinnegy properties, the bank wants to “protecf the interest of all involved.”