Two new lawsuits stemming from Broadbent Co.’s financial problems charge company President George Broadbent defaulted on loans and owes more than $2.6 million.
The suits, filed in recent weeks by PNC Bank and Huntington National Bank, are the latest salvo in lenders’ legal assault on the 38-year-old firm, long one of the city’s biggest developers of shopping centers. All told, financial institutions are seeking to collect about $13 million.
Broadbent, like scores of commercial real estate developers, is dealing with the lingering effects of a recession that boosted vacancy rates and shrank property values.
“The problem is large, and it’s anticipated we’ll see more defaults,” said Debbie Caruso, a local bankruptcy lawyer and trustee who is not involved in the Broadbent case.
Lawyers for both the company and the banks declined to comment or didn’t return phone calls.
Two of Broadbent’s larger projects in the Indianapolis area—Clearwater Crossing along East 82nd Street and Greenwood Place on South U.S. 31—are ensnared in the litigation.
In one of the new suits, Columbus, Ohio-based Huntington sued George Broadbent and White River Investments, a partnership that owns at least part of Clearwater Crossing.
The bank says a nearly $1.3 million loan it extended in 2005 is in default, with an unpaid balance of $1.1 million. Huntington is asking a Marion Superior Court judge to foreclose on the property and order its sale.
Clearwater Crossing, along with North Willow Commons at West 86th Street and Ditch Road, also is caught up in a suit Huntington filed in January. The bank says the developer owes more than $1 million on a loan arranged in 2001 and refinanced twice.
In the other new lawsuit, PNC says George Broadbent is in default on a $1.5 million loan it extended to him in April 2009.
The complaint, filed in federal court, said PNC provided the loan so he could refinance a line of credit extended to him in March 2006 to provide liquidity for various projects.
The court fights began in August, when the company sued PNC and Huntington, claiming they were wrongly attempting to restrict access to a $50 million credit line.
Broadbent claims the banks had refused to advance $3.7 million it was entitled to for construction of its Fleming Island Retail Shoppes outside of Jacksonville, Fla., and for the renovation of Greenwood Place.
The banks countersued in November, seeking to collect $1.1 million in principal, interest and late fees they allege Broadbent owes on the Greenwood property.
On Jan. 20, a Broadbent subsidiary that owns Greenwood Point, a 135,865-square-foot strip mall across the street from Greenwood Place, filed for Chapter 11 bankruptcy protection.
Earlier that month, Boston-based CWCapital Asset Management LLC, which holds the property’s $6.9 million mortgage, sued for foreclosure and asked the court to appoint a receiver.
In February, PNC sued Broadbent, alleging the company owes $1.2 million on a 2007 loan tied to its Coliseum Shoppes strip mall in Fort Wayne.
Caruso, the attorney who represents banks and developers in bankruptcies and reorganizations, said some lenders are either unwilling or unable to renegotiate the terms of a loan.
But they may wait longer than usual to take disputes to court, simply because there are so many defaulted loans these days.
Broadbent, originally known as Skinner & Broadbent, prospered for years by snapping up land and building shopping centers near regional malls. Twenty-six of its 34 centers are in the Indianapolis area.•