IBJNews

Local firm's Carolina development slides into bankruptcy

Back to TopCommentsE-mailPrintBookmark and Share

A second residential project in North Carolina led by Flaherty & Collins Properties has landed executives of the Indianapolis-based development firm back in bankruptcy court.

Flaherty & Collins’ Brier Creek FC LLC filed for Chapter 11 bankruptcy reorganization in Indianapolis on Tuesday, listing both liabilities and assets of between $10 million and $50 million. It's the second Flahery & Collins project in North Carolina to experience bankruptcy in the past six months.

Flaherty & Collins is the developer of The Exchange at Brier Creek Apartments, a mixed-used project in Raleigh, N.C., featuring a 274-unit complex, movie theater and fitness center. Brier Creek is the owner of the complex.

The Brier Creek complex was finished in 2008 and has an occupancy rate of 93 percent, according to court documents.

A spokesman for Flaherty & Collins blamed Brier Creek FC’s financial troubles on an outside management company it used before turning those responsibilities over to its Flaherty & Collins Management division.

“They failed to get it leased,” Mark Conover said Thursday morning. “At the same time, what happened with the economy, the rents didn’t rise like they should have because of the job situation in Raleigh, and we missed a couple of [debt] payments.”

Brier Creek FC has no employees but pays workers provided by Flaherty & Collins Management Inc. to operate and manage the complex. In its bankruptcy filing, Brier Creek is asking to use collateral it has with its bank, First Horizon Home Loans in Irving, Texas, to pay the employees. Payroll expenses total about $46,000 a month.

First Horizon loaned Brier Creek FC $24.8 million to develop the apartment project, according to court documents.

“If debtor is not permitted to use its cash collateral to operate its business and maintain the property securing the Indebtedness, the debtor will have to cease operations,” Wendy Brewer, the attorney for Brier Creek FC, wrote in a court filing.

In exchange for the collateral, Brier Creek FC said it will provide replacement liens to First Horizon and will make monthly payments to the bank equal to the current interest amount of $36,100 month.

Brier Creek filed for bankruptcy reorganization to keep its lender from selling the loan to what Conover referred to as a “hostile group.”

The largest unsecured creditors listed on the bankruptcy filing, Indianapolis-based LC Investors LLC and Flaherty & Collins Development, are owed $3 million and $1.2 million, respectively.

A hearing on Brier Creek FC’s motion to use bank collateral to pay employees is set for 1:30 p.m. Friday.

The filing marks the second time a company operated by Flaherty & Collins’ owners has sought bankruptcy protection in the past six months.

In November, Charlotte FC LLC filed for Chapter 7 bankruptcy liquidation, listing liabilities of $53 million and assets of just $197,492. Charlotte FC had planned to build 48 floors on top of a retail portion of a mixed-use development called EpiCentre.

The unfinished, 53-story condo tower in Charlotte, N.C., with a price tag topping $200 million, would have been the tallest residential building in the Carolinas.

David Flaherty and Jerry Collins founded their business in 1993. Flaherty & Collins manages more than 12,000 apartment units in 10 states. It also has developed nearly two dozen projects, including the $37 million Cosmopolitan on the Canal along the Central Canal downtown.
 

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. "This was a very localized, Indiana issue," he said. As in, Indiana failed to expand Medicaid to cover its poor citizens resulting in the loss of essential medical services, including this EMS company. Well done, Indiana GOP. Here are the real death panels: GOP state governments who refuse to expand Medicaid for political reasons.

  2. In the "one for all, all for none" socialist doctrine the sick die...this plus obama"care" equates to caucasian genocide plus pushed flight to cities thus further eroding the conservative base and the continualed spiral toward complete liberal/progressive/marxist America.

  3. There is a simple reason why WISH is not reporting on this story. LIN has others stations in different markets that are affiliated with CBS. Reporting about CBS blindsiding WISH/LIN due to CBS's greed and bullying tatics would risk any future negoations LIN will have with CBS in other markets.

  4. My best always! Dave Wilson

  5. How did Columbus, Ohio pull off a car share service without a single dollar of public subsidies? They must not have a mayor who is on the take like Indianapolis. Daimler Benz offers Columbus residents their Smart Cars on a market-driven basis: "This has some neat features. Cars don’t have to be picked up and dropped off at fixed points. You find one with your smart phone based on GPS, and drop it off anywhere in the service area you can find a spot – even at a meter. These cars aren’t required to feed the meter so you get free on street parking while using them. I was told this system was put in place on a market basis without subsidies – and that the vendor actually pays the city for the use of the meters." http://www.urbanophile.com/2014/05/26/checking-in-on-columbus/

ADVERTISEMENT