TEMPE, AZ-Centerpoint Condominium developer Avenue Communities LLC filed for voluntary Chapter 11 protection in the Arizona District of US Bankruptcy Court on Dec. 5. The move was made in conjunction with a 10-count lawsuit filed the same day against lender Mortgages Ltd., alleging that the Arizona lender never came forward with promised funds for development of the 275-unit Centerpoint Condominiums.

Ken Losch, principal with locally based Avenue Communities says the actions will help Centerpoint’s development entity Tempe Land Co. LLC seek relief from creditors and investors resulting from Mortgages Ltd. non-payment of a promised loan for the development at 110 E. Seventh St. “No one will be shorted. Investors are going to get 100 cents on the dollar. That’s not what any of this is about,” Losch says.

Stanley Bronstein, a licensed real estate lawyer and CPA in Arizona, says filing Chapter 11 is the only way Avenue Communities could slow demands of creditors and investors, while new financing is put in place and the court decides the outcome of the suit against Mortgages Ltd. “Chapter 11 gives him time and control to have a prayer of this working out,” says Bronstein, who is not involved with the case, nor affiliated with Mortgages Ltd. “This move makes sense to me. He has people chasing him. He’s trying to slow them down, and allow him the chance to make things happen.”

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