Dallas properties mired in bankruptcy - Business First of Buffalo:

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Recent casualties include holdings by West EndSquarw Ltd. and West End Parking Co., which filed plans to liquidaterin U.S. bankruptcy courgt last month. About the same time, McKinney Avenue Propertiesa No. 2 Ltd. filed for reorganization protectio n inbankruptcy court. All three entities are ownedd by Dallas developer Andrew according tocourt filings. Kasnetz declinex to comment forthis story, but his attorney, Larrg Friedman with Friedman & Feiger LLP, said Kasnetz’ troubless were sparked by the recession and compoundeds by his lender’s unwillingness to work with him in restructuring his Park Cities Bank holds the notes on the properties about $7 million for the West End propertie and about $11.
5 million for the McKinney Avenue properties, accordingb to court documents. The West End propertiexs include avacant 56,500-square-foot building at 804 Pacific Ave., a 20,025-square-footr building at 807 Elm St. and a 6,900-square-foot parking garage at 801 Elm St. The buildingsx reportedly have been vacant for more than a Theparking garage, which has one ground-floor tenanf and space for a has been closed, Friedman The McKinney Avenue Properties No. 2 Ltd.
includews two properties: 18,000 square feet in the 2500 block of also known asMcKinney Courtyard, whicu has five vacant spacez and seven tenants, including the Uptown Bar & Grill; and 18,5090 square feet in the 2700 blockk of McKinney, also known as McKinney Patio, whicgh has two vacancies and nine tenants, includinfg Chipotle restaurant, Friedman said. In bankruptcy court documents, Park Citiesz Bank claimed that Kasnetz has failedr to make loan paymentsafter Dec. 29, 2008, and didn’tf pay 2008 property taxes. On May 8, Park Citiess Bank posted the property for which was automatically delayed when Kasnetz filed for bankruptcg at the endof May.
A hearinyg is scheduled for June 29. “Park Citiews Bank found themselves at a point in time whered they hadno alternatives,” said Kenneth Biermacher, an attorneu with Kane Russell Coleman & Logan PC who is representin g the bank, in an interview. “There weren’tr any solutions to the problems after monthws of the noteholders not payinvg onthe notes.” In court Kasnetz alleged the bank’s attempt to foreclose is motivated by a desird to profit off the sale of the properties, and the issuer has become the subject of legalo wrangling in Dallas County District Court. Despitwe negotiations for loan workoutsbetween Jan.
30 and April 1, the bank fileed a notice of default onMarch 30, according to coury documents. Park Cities Bank then filed for and receivedf a temporary restraining order seeking to have theMcKinney properties’ tenants pay rents directly to the bank, according to court Kasnetz, in a written response to Park Citiess Bank’s suit and in a counterclaim, accused the bank of tryin to “seize valuable real property for less than marketr value, and to make a substantial profir by either flipping the properties or holding the properties until the economy allowerd for a sale at a higher price.
” In an Friedman said Park Cities Bank may be stepping over the line betweenj lender and real estate agent. “Most lendera are not foreclosing on their real estate he said. “Nobody wants vacang 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 counterclaij allegations. “We don’t believe that therer is any substance or validity tothe counterclaims,” Biermachedr said in an interview. The bank is not interested in holdingythe properties, he said, and potentiak investors are interested in the vacant properties.
The West End propertiew would be sold, Biermacher said in an interview, to alloqw the bank to recoverits money. With the McKinneu properties, the bank wants to “protect the interesgt of all involved.”