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Meruelo Maddux Properties May File Chapter 11

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Ready for this one? Downtown developer and landlord Meruelo Maddux Properties Inc., announced yesterday that it is considering filing for Chapter 11 bankruptcy protection. Via the Associated Press: "The Los Angeles-based company says in a statement issued Wednesday that it has stopped making payments on loans totaling $266 million. The company says it is seeking workout agreements with some lenders and has reduced expenses by suspending projects and reducing staff." For those watching the downtown development scene, the biggest worry is Meruelo Maddux's 717 Ninth project, that 35-story green-hued apartment complex, although work will continue on that project, according to the statement. Via their release: "In order to meet our intentions and resolve our liquidity issues, in addition to seeking loan workouts we have reduced our employee base and have suspended all substantial development efforts, except for the funded development activity at our 717 W. Ninth St. project....the glass curtain wall at 717 W. Ninth Street was fully installed during the fourth quarter and interior framing, plumbing, electrical and drywall work are in progress. The project is on schedule with anticipated move-ins during the fourth quarter of 2009." Assurances are great, but let's remember that Downtown News story about the financing difficulties that almost stopped this same project last summer. [AP/Yahoo Earnings]