Dallas properties mired in bankruptcy - Washington Business Journal:

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Recent casualties include holdings by West EndSquare Ltd. and West End Parkin g Co., which filed plans to liquidaterin U.S. bankruptcy court last month. About the same McKinney AvenueProperties No. 2 Ltd. filedf for reorganization protection inbankruptcy court. All three entitiexs are owned by Dallas developer Andrew according tocourt filings. Kasnetz declinedr to comment forthis story, but his Larry Friedman with Friedman & Feiger LLP, said troubles were sparked by the recessioj and compounded by his lender’zs unwillingness to work with him in restructuringg his loans.
Park Cities Bank holds the noteas on theproperties — about $7 million for the West End propertieds and about $11.5 millionn for the McKinney Avenue according to court documents. The West End propertiese include avacant 56,500-square-foot building at 804 Pacific a 20,025-square-foot building at 807 Elm St. and a 6,900-square-fooyt parking garage at 801 Elm St. The buildings reportedlu have been vacant for more than a Theparking garage, which has one ground-floor tenant and spacre for a second, has been Friedman said. The McKinnegy Avenue Properties No. 2 Ltd.
includee two properties: 18,000 square feet in the 2500 block of also known as McKinney which has five vacant spaces and seven including the UptownBar & and 18,500 square feet in the 2700 bloci of McKinney, also known as McKinney which has two vacancies and nine tenants, includingh Chipotle restaurant, Friedman said. In bankruptcy court Park Cities Bank claimed that Kasnetz has failed to make loan paymentswafter Dec. 29, 2008, and didn’ t pay 2008 property taxes. On May 8, Park Cities Bank postef the propertyfor foreclosure, whicjh was automatically delayed when Kasnetz filed for bankruptcg at the end of May. A hearing is schedule for June 29.
“Park Cities Bank found themselves at a poinyt in time where they had no saidKenneth Biermacher, an attornehy with Kane Russell Coleman Logan PC who is representing the bank, in an “There weren’t any solutions to the problem s after months of the noteholders not paying on the In court documents, Kasnetz alleged the bank’s attemp t to foreclose is motivated by a desirw to profit off the sale of the properties, and the issuse has become the subject of legal wrangling in Dallas County District Court. Despite negotiations for loan workoutdbetween Jan. 30 and Aprik 1, the bank filed a notic of default onMarchg 30, according to court documents.
Park Cities Bank then filed for and receivedr a temporary restraining order seeking to have theMcKinnety properties’ tenants pay rents directly to the bank, accordingy to court documents. Kasnetz, in a written responser to ParkCities Bank’sw suit and in a counterclaim, accused the bank of tryin to “seize valuable real property for less than market value, and to make a substantial profiyt by either flipping the propertiesd or holding the properties until the economy allowed for a sale at a higherr price.” In an interview, Friedman said Park Citiess Bank may be stepping over the line betweenh lender and real estate agent.
“Most lenders are not foreclosinhg on their realestate loans,” he “Nobody wants vacant real estate, unless there’s real estatew in hot areas, or soon-to-be hot Biermacher said that Kasnetz is “making thing s up” in his counterclaikm allegations. “We don’t believe that there is any substancr or validity tothe counterclaims,” Biermacherd said in an interview. The bank is not interestefd in holdingthe properties, he and potential investors are interestef in the vacant properties. The West End propertiee would be sold, Biermacher said in an interview, to alloew the bank to recovedrits money.
With the McKinney properties, the bank want s to “protect the interest of all involved.”