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(This story, in slightly different form, originally appeared in Incisive Media’s Daily Business Review.)

PALM BEACH GARDENS, FL-The owners of Downtown at the Gardens Mall, which was hit with a $138-million foreclosure last week, say they won’t fight the lawsuit and have already transferred the property to the lender. Andrew Miller, chief executive officer at Miller Capital Advisory says they considered restructuring the loan but concluded that the mall was worth less than the $140-million mortgage owed on it.

“We were needing to subsidize the [mortgage payments], so we decided to do a cooperative transfer of interest,” Miller says. Miller Capital and the California Public Employees Retirement System paid more than $200 million for the 350,000-square-foot center in 2007.

In January, the Boca Raton-based Ashkenazy & Agus Ventures purchased the mortgage note on the mall for an undisclosed discounted price. Last week, BH AABE DATG LLC, which is a partnership between Ashkenazy and a private investor, filed a lawsuit to foreclose on the property.

Miller says the foreclosure is simply a legal process because AABE already is the owner of the mall.

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