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Developer George Broadbent sued for $9M by widow of co-founder

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Greg Andrews

Robert Skinner and George Broadbent were quite a team. Together, theyfounded the Skinner & Broadbent Co. in 1972 and built it into a development power-house. By the time Skinner retired in 1987, the company had built nearly three dozen shopping centers throughout the Midwest.

But those halcyon days are a distant memory for CEO George Broadbent, who’s spent much of this year battling lawsuits that charge he and the firm, now known as Broadbent Co., have defaulted on millions of dollars in loans.

The latest lawsuit carries some extra sting: It was filed in June by Skinner’s widow, Avis, who alleges Broadbent isn’t making the payments he committed to when he bought out Skinner’s real estate interests in 2006.

Broadbent-George-mug Broadbent

Broadbent negotiated the purchase that July, three months after Skinner’s death from cancer at age 73. Broadbent executed a promissory note for $9.1 million, with interest accruing at 4.9 percent. He was supposed to make monthly payments of $95,840 until July 2016, when the remaining balance would be due.

But according to the lawsuit, Broadbent in January 2009 started making only partial monthly payments. The suit says Broadbent now is in default, boosting the interest rate to 12 percent and making the entire balance—$7.7 million—immediately due.

Broadbent, 69, and one of his attorneys did not return calls seeking comment.

The suit represents the latest in a long list of setbacks for George Broadbent and his company, which now are ensnared in about a half dozen lawsuits, most filed by financial institutions. Court papers charge he or the firm has defaulted on nearly $20 million in debts.

Broadbent Co. operates some of the most successful shopping centers in Indianapolis, but also has others with steep vacancies. The firm has run into trouble even with nearly full centers, such as North Willow Commons at West 86th Street and Ditch Road. Another, Greenwood Point on U.S. 31, landed in bankruptcy.

Real estate experts say the recession has walloped many strip center developers, boosting vacancy rates while simultaneously shrinking the appraised value of the real estate that serves as collateral on loans.

Avis Skinner wasn’t exactly quick to lower the boom on her husband’s former partner. According to court papers, her attorneys did not formally declare Broadbent in default until April 6—13 months after he started making smaller-than-required payments.

The notice gave Broadbent 10 days to catch up on payments, but he failed to do so, the lawsuit says.

Fee frenzy

There’s nothing like a little M&A activity to get the fees flowing.

Two local deals—Jeff Smulyan’s $90 million buyout of Emmis Communications Corp., and the city’s $1.9 billion sale of sewer and water utilities to Citizens Energy—are funneling millions of dollars to investment bankers, lawyers, accountants and other professionals at a time business is otherwise slow.

Take the utilities deal. Taking a lead role in representing the city was New York-based Citigroup Global Markets Inc., which would collect $5.3 million if the deal closes.

Law firms, whose pay doesn’t hinge on closing, also are in line for seven-figure paydays. Representing the city is Baker & Daniels, which is estimated to receive $2 million. It bills at hourly rates ranging from $140 for junior legal assistants to $620 for its most experienced partners.

The Emmis deal is tiny by comparison, but the fees aren’t. Wall Street lawyers represent Smulyan and his financial backer, New York-based Alden Global Capital. But Smulyan also enlisted the Indianapolis office of Taft Stettinius & Hollister, and Alden hired locally based Krieg DeVault.

JS Acquisition, the company Smulyan formed to make the purchase, expects to rack up legal fees and expenses of $5.5 million, according to an Emmis regulatory filing.

A committee of independent board members that analyzed Smulyan’s buyout offer hired its own counsel, locally based Barnes & Thornburg.

Upon closing, Smulyan’s New York-based investment banking firm, Moelis & Co., would collect $3.5 million. Morgan Stanley, adviser to the independent directors, is due “up to” $2 million, according to the filing.

Left with a mere $500,000 is the Virginia-based investment banking firm BIA Capital Partners. Smulyan hired the firm in October 2009 to advise him on strategy and fundraising, but it was unable to put together a deal that would have yielded a bigger payday.

Smulyan sent BIA to the sidelines in April, around the time Moelis entered the picture and paved the way for a key meeting with Alden officials.•

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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