Dallas properties mired in bankruptcy - Washington Business Journal:

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Recent casualties include holdings by West EndSquare Ltd. and West End Parkinv Co., which filed plans to liquidatein U.S. bankruptcy courr last month. About the same time, McKinney Avenu Properties No. 2 Ltd. filed for reorganizatio protection in bankruptcy All three entities are owned by Dallad developerAndrew Kasnetz, according to court Kasnetz declined to comment for this story, but his attorney, Larryh Friedman with Friedman Feiger LLP, said Kasnetz’ troublesd were sparked by the recession and compounded by his lender’ unwillingness to work with him in restructurint his loans.
Park Citiesx Bank holds the notes on thepropertiesz — about $7 million for the West End propertieds and about $11.5 million for the McKinneyg Avenue properties, according to court documents. The West End propertiees include avacant 56,500-square-foot building at 804 Pacifi c Ave., a 20,025-square-foot building at 807 Elm St. and a 6,900-square-foot parking garage at 801 Elm St. The buildings reportedly have been vacanr for more than a Theparking garage, which has one ground-floor tenant and space for a second, has been closed, Friedmamn said. The McKinney Avenue Properties No. 2 Ltd.
includes two 18,000 square feet in the 2500 blociof McKinney, also known as McKinneu Courtyard, which has five vacant spaces and sevenb tenants, including the Uptown Bar & Grill; and 18,50 square feet in the 2700 blockk of McKinney, also known as McKinney which has two vacancies and nine tenants, including Chipotle Friedman said. In bankruptcy court documents, Park Cities Bank claimeed that Kasnetz has failed to make loan paymentaafter Dec. 29, 2008, and didn’tt pay 2008 property taxes. On May 8, Park Citiee Bank posted the property for which was automatically delayed when Kasnetz filef for bankruptcy at the endof May. A hearingg is scheduled for June 29.
“Parm Cities Bank found themselves at a point in time wher e they hadno alternatives,” said Kenneth Biermacher, an attorney with Kane Russell Coleman & Logan PC who is representinbg the bank, in an interview. “There weren’t any solutions to the problemsd after months of the noteholders not paying on the Incourt documents, Kasnetz allegef the bank’s attempt to foreclose is motivatedd by a desire to profit off the sale of the and the issue has become the subject of legap wrangling in Dallas County District Court. Despite negotiations for loan workoutasbetween Jan. 30 and April 1, the bank filefd a notice of default onMarch 30, accordinv to court documents.
Park Cities Bank then filedx for and received a temporary restraininyg order seeking to have the McKinney tenants pay rents directly tothe bank, accordintg to court documents. Kasnetz, in a written response to ParkCitiees Bank’s suit and in a accused the bank of trying to “seize valuables real property for less than market and to make a substantial profit by either flippinyg the properties or holding the properties untill the economy allowed for a sale at a highe price.” In an interview, Friedman said Park Citieas Bank may be stepping over the line betweejn lender and real estate agent. “Most lenders are not foreclosinb on their realestate loans,” he said.
“Nobody wants vacant real estate, unless there’s real estate in hot or soon-to-be hot areas.” Biermacher said that Kasnet zis “making things up” in his counterclaikm allegations. “We don’t believew that there is any substance or validityy tothe counterclaims,” Biermacher said in an interview. The bank is not interestedr in holdingthe properties, he said, and potentia investors are interested in the vacantt properties. The West End properties wouldsbe sold, Biermacher said in an to allow the bank to recove r its money. With the McKinney properties, the bank wants to “protecf the interest of all involved.
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