Premier Properties and Real Estate & Retail

Premier Properties auction attracts no bids

April 17, 2008
No bids were submitted today at an auction for control of 10 properties owned by Indianapolis-based Premier Properties USA Inc., the financially troubled development company run by Chris White.

That means Atlanta-based Dominion Capital Management LLC - one of Premier's largest lenders - will take control of the properties this afternoon and bring in property managers to operate them.

Dominion Capital has hired CB Richard Ellis to manage Premier's properties in Indianapolis. Those properties include the 600,000-square-foot Metropolis mall in Plainfield, a strip center called Plainfield Commons, and a parcel at 86th Street and Haverstick Road where another developer had proposed a Whole Foods.

Dominion Capital General Counsel Bill Armstrong said he would sign papers this afternoon that transfer control of most of the properties to Dominion. Control of the Metropolis mall in Plainfield has been transferred via a separate agreement.

Dominion Capital has received inquiries from several potential buyers, including one interested in buying all 10. Now that the properties have been offered publicly, as required by statute, those sales discussions are likely to continue privately, Armstrong said.

"We have lots of interest in the properties," Armstrong said after the auction. He added, "We have to go through this process."Nineteen people attended the hearing, but most were creditors of Premier or investors in Dominion, Armstrong said.

Among the attendees were two Premier executives: Chief Financial Officer Joshua Kane and General Counsel Bruce Smith.

A call to Smith after the auction was not immediately returned.

Dominion Capital has hired managers for Premier's other properties around the country, Armstrong said. They include several lifestyle malls in various stages of development: Sixteen West in Georgia; Bridgewater Falls in Ohio; The Foundry in Pennsylvania; The Marquis in Virginia; and The Current in Florida.

Premier and its founder, Christopher P. White, face numerous lawsuits alleging unpaid bills, defaulted loans, illegally redirected rent payments and check fraud. The company laid off half of its headquarters staff - about 40 employees - at the end of March.

The sale of Premier's real estate holdings could signal that an end is near for the 15-year-old company, which built its name on outsize deals with little margin for error but has sputtered since credit markets tightened and easy credit disappeared.

The auction was organized by Ice Miller attorney Henry Efroymson. After adjourning the auction, he said it was, "Much ado about nothing."

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