Calling it a strategic move meant to protect the buyers of Concerto, Sonny Astani put his new downtown development in Chapter 11 bankruptcy protection last Thursday, according to documents filed in LA Central Bankruptcy Court. Astani didn't immediately return calls, but in a widely circulating email sent last week (to what looks like staff of Concerto), he explained why he filed for Chapter 11 on Concerto. Additionally, he references a suit against Corus Bank: "Corus Bank did not provide a substantive response or give any other indication of cooperation and, accordingly, on September 4th we filed a lender liability lawsuit in the Los Angeles Superior Court. Since the take-over, we have tried to contact the FDIC to purchase our own construction loan but have not received a response. Because we want our buyers to be able to close despite the bank failure and FDIC’s bidding process, and additionally to protect the interests of our buyers, contractors and investors, we have decided to file a reorganization petition with the United States Bankruptcy Court in downtown Los Angeles. This will also allow us to close the 77 units, pay our contractors and complete the construction of the tower, amenities, and the retail space, without interference or further delay." The filing in US Central Los Angeles Bankruptcy Court is bk-35127-VZ. We'll have more on this tomorrow.
The email from Sonny Astani. He wasn't able to confirm that he wrote it because he didn't immediately return calls, but this email has been widely circulating since last week and has the masthead of Astani's company.
Dear Concerto Team:
It has been a pleasure to have you in our Team for the last 5 years to see the completion of CONCERTO through, however as many of you may have heard, Corus Bank (our construction lender) has been the subject of news reports for several months concerning its financial problems.
After not performing for the last 6 months, Corus was finally taken over by the FDIC on Friday, September 11, 2009. We understand that Corus Bank’s banking branches have been transferred to another bank but that its loans -- including our construction loan -- are part of a “bid package” that are still up in the air and will be sold in the next 30 to 60 days.
Prior to the failure of Corus Bank, we successfully sold all 77 units in the Loft building in one day. The proceeds from these sales were intended to be utilized to complete the Tower. We presented our sales results and asked the bank to work together with us to complete the sales and construction. Corus Bank did not provide a substantive response or give any other indication of cooperation and, accordingly, on September 4th we filed a lender liability lawsuit in the Los Angeles Superior Court. Since the take-over, we have tried to contact the FDIC to purchase our own construction loan but have not received a response. Because we want our buyers to be able to close despite the bank failure and FDIC’s bidding process, and additionally to protect the interests of our buyers, contractors and investors, we have decided to file a reorganization petition with the United States Bankruptcy Court in downtown Los Angeles. This will also allow us to close the 77 units, pay our contractors and complete the construction of the tower, amenities, and the retail space, without interference or further delay.
We believe that, by taking the initiative in this manner, the Court will be able to act promptly to accommodate the project’s interest without the delay and uncertainty associated with Corus Bank’s failure and the bidding process. We wanted to formally inform you and thank you for your support. We look forward to having a completed project soon.
Best regards,
SONNY ASTANI | www.astanienterprises.com
t 310.273.2999 ext. 14 | f 310.550.4564
9595 Wilshire Blvd., | Penthouse 1010 | Beverly Hills, CA 90212
· 10 Things We Learned About Downtown's Concerto [Curbed LA]
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