Lender seeks to foreclose on Castleton Plaza

February 1, 2011

A lender who says it is owed $10 million on a loan provided to the owner of the Castleton Plaza shopping center along East 82nd Street is seeking to foreclose on the property.

The foreclosure request, filed Jan. 26 in Marion Superior Court by New York-based German American Capital Corp., is the latest in a string of legal battles ensnaring Indianapolis-based Broadbent Co.

Castleton Plaza LP, the owner of the shopping center, is a subsidiary of Broadbent, long one of the city’s biggest shopping-center developers.

German American claims Castleton Plaza owes nearly $8.7 million on the balance of a $9.5 million loan made in August 2000, as well as $1.1 million in interest. Additional fees bring the total its is seeking to $10 million.

The lender is calling for a court-appointed receiver to take possession of the property, which it wants sold at a sheriff’s sale to help satisfy the debt, according to court documents.

Broadbent lawyer Erick Ponader of the Indianapolis office of Cincinnati-based Taft Stettinius & Hollister LLP, however, said his client is working with the lender and is confident a foreclosure can be avoided.

Castleton Plaza contains 171,736 square feet of retail space and is anchored by a Sam Ash Mega Store and Dollar Tree.

“While it’s in the Castleton trade area, it’s had some struggles maintaining occupancy and attracting tenants,” local retail broker Eric Hillenbrand said.

Legal filings illustrate the struggles of other Broadbent properties.

Broadbent subsidiary White River Investments LP voluntarily filed for Chapter 11 in October. The attempt to reorganize continues in U.S. Bankruptcy Court in Indianapolis.

And Greenwood Point LP, which owns the Greenwood Point strip mall across the street from Greenwood Place, filed for reorganization in January 2010. That case also is pending in federal bankruptcy court.

In addition, two lawsuits allege company President George Broadbent defaulted on loans.

In one of the suits, Columbus, Ohio-based Huntington National Bank sued George Broadbent and White River Investments, a partnership that owns at least part of Clearwater Crossing, also on East 82nd Street.

The court granted Huntington a judgment of $631,580 in December.

The other suit, filed by Pittsburgh-based PNC Bank, said George Broadbent defaulted on a $1.5 million loan it extended to him in April 2009. The court awarded PNC the amount in October.

The court fights began in August 2009, when Broadbent sued PNC and Huntington, claiming they were wrongly attempting to restrict access to a $50 million credit line.

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