IBJNews

Financial backer agrees to drop suit against Lauth

Back to TopCommentsE-mailPrintBookmark and Share

The largest financial backer of Lauth Group Inc. agreed Thursday to drop its federal lawsuit against the Indianapolis-based real estate developer, which is reorganizing under bankruptcy protection.

An affiliate of Chicago-based Inland American Real Estate Trust canceled the suit, while another affiliate withdrew its request to have a Chapter 11 trustee appointed to oversee Lauth’s operations.

“We will continue to move forward with the important business of restructuring the company’s portfolio and exiting bankruptcy,” Lauth Chairman Robert Lauth said in a written statement. “Both parties agreed to appoint a special mediator to participate in the bankruptcy cases and provide the court with non-binding commentary on proposed restructuring efforts.”

The judge set a hearing on a settlement agreement involving four of Lauth’s properties for April 20.

Inland American invested $228 million in 2007 for an ownership stake in dozens of Lauth properties. But Lauth defaulted on its agreement to pay dividends to Inland in late 2008, and several Lauth subsidiaries filed for Chapter 11 bankruptcy reorganization in May 2009.

Lauth’s troubles began in early 2008 as demand dried up for the office, industrial and retail developments that had fueled its rapid growth. The company doubled its revenue from 2004 to 2005, then doubled it again from 2005 to 2006. During the same period, the value of Lauth’s project lineup jumped from $143 million to $592 million.

The company started 2008 with about 450 employees, but layoffs have since shrunk the staff to about 40.

Inland initially challenged Lauth’s bankruptcy filing by claiming it had taken control of Lauth's holding company, LIP Holdings LLC, after it defaulted on their agreement.

But Lauth pointed to a section of the original agreement with Inland that required approval from at least one Lauth representative and one Inland representative for major company decisions, including a change in control. The judge agreed with Lauth’s interpretation.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT