A retail establishment might soon be part of Charlotte foreclosure auctions as owners of the EpiCentre commercial property have filed for a Chapter 11 protection. A bankruptcy judge has approved the filing for the retail and entertainment center.
According to real estate market observers, the issue regarding EpiCentre shows that it is not only foreclosure home auctions in North Carolina that are contributing to the housing market problems of the area. Commercial properties are also getting hit by the real estate crisis, as evident in the recent bankruptcy filing made by the center's developers, Pacific Avenue LLC and Pacific Avenue II LLC.
With a big number of foreclosed dwellings ending up being sold in auctions of foreclosure houses in the state, the trouble facing the Charlotte commercial property did not come as a surprise for most market observers. A foreclosure proceeding has been launched by Regions Bank following the alleged failure of the commercial property's owners to pay the necessary obligation upon the note's maturity.
According to Regions Bank, the Pacific Avenue firms borrowed a total of $90 million on the commercial property, which is now facing the possibility of ending in Charlotte foreclosure auctions. The bank further revealed that the loan's maturity date was May 5 but the owners have not made any payment since December of last year.
Meanwhile, the owners of EpiCentre are suing Regions Bank over issues related to the loan agreement. Pacific Avenue's manager, The Ghazi Co., has stated that the bankruptcy protection was filed to prevent Regions Bank from conducting a "wrongful foreclosure" on the EpiCentre complex and to allow the limited companies to conduct debt reorganization.
The judge who approved the bankruptcy filing also approved several motions related to the case, including allowing the companies to use their bank accounts to pay for the unpaid salaries and benefits of Scott Cook, chief financial officer for the property, and several other employees tasked with overseeing and managing the property. In addition, EpiCentre will also be allowed to continue paying utility bills. An emergency motion which will allow cash collateral to be used has also been approved, albeit on an interim basis.
Whether EpiCentre will end up as one of the properties offered under Charlotte foreclosure auctions will not be known until weeks from now as both parties involved try to present their arguments to the courts.
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