[Image via Friday in LA]
It’s been downhill for Roosevelt Lofts ever since that giant cake appeared. Documents filed in United States Bankruptcy Court/Central District of California show that yesterday Roosevelt Lofts LLC filed for Chapter 11 bankruptcy protection. Owned by local developer Milbank Real Estate, the 12-story Roosevelt Lofts building at 727 West 7th Street has seen a rocky year of move-in delays and a lawsuit, so the filing isn't entirely surprising. You can download the bankruptcy filing here. But what's important to know about this filing is that it's an emergency filing, and only lists the unsecured creditors. UPDATE: A media statement from the Roosevelt Lofts LLC is after the jump.
What isn't shown, for example, is how much the secured lenders like Bank of America are owed. (It's also unclear if any foreclosure proceedings have begun.) Meanwhile, how's it going to affect that lawsuit? As reported earlier this year, a group of buyers are suing Milbank, alleging among other things, that their deposits weren't returned. Bill Pham, partner at McKenna Long & Aldridge, who is representing the plaintiffs, says typically deposits are put in escrow so the buyers' money is probably safe. "The filing may result in a stay against our lawsuit, I will have to look to see what they are filing," says Pham. According to their web site, Milbank is a 27-year-old Los Angeles-based real estate company that deals in development and commercial property management. This Chapter 11 filing follows the Chapter 7 filing of the Brockman. In the most simple terms, Chapter 7 is usually referred to as a liquidation filing and filing Chapter 11 is typically an attempt at re-organization.
UPDATE: "Media Statement on behalf of Roosevelt Lofts, LLC. A voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Central District of California has been filed by Roosevelt Lofts, LLC, a luxury condominium project in Downtown Los Angeles. Chapter 11 is the section of the United States Bankruptcy Code that regulates company reorganizations. The for-sale, residential community will continue to market its condominium loft-style units without interruption during the reorganization. The Roosevelt’s sales office remains open, and sales associates are available to work with prospective buyers in the purchase of loft homes.
The decision to file for Chapter 11 protection was driven primarily by actions taken by the Bank of America, the construction lender, which refused to allow Roosevelt Lofts, LLC to start closing units at The Roosevelt.
Filing for Chapter 11 will provide Roosevelt Lofts, LLC with the tools necessary to restructure its loan agreement with the Bank of America in order to allow for the closing of units which are currently under contract, proceed with sales of additional units, and complete the project.
There is no direct legal relationship between Roosevelt Lofts, LLC and Milbank Real Estate Services, Inc. Milbank is thus not affected by Roosevelt's Chapter 11 filing, and continues to operate its various business operations and real estate ventures without interruption or oversight by the Bankruptcy Court."
· Downtown's Most Beautiful Building Files for Bankruptcy [Curbed LA]