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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowLauth Group Inc. says it was forced to file for Chapter 11 bankruptcy last week after its largest creditor launched an effort to “cherry pick” the developer’s best properties and let the rest collapse “to the detriment of all other creditors.”
The locally based developer, once the nation’s 13th largest, said attempts by Chicago-based Inland American Real Estate Trust Inc. to push aside the company’s top management created a state of confusion among its lenders and gave Lauth no choice but to file for bankruptcy reorganization.
Inland had agreed in 2007 to provide Lauth with $250 million to finance the firm’s meteoric growth, which fizzled as the real estate market tanked.
The company said in the court filing that it had been trying to restructure its debts outside of bankruptcy court until April 27, when Inland launched a “campaign to seize the remaining gems of the Lauth empire to satisfy its own interests.”
The filing says principals in the company had loaned the firm $7 million to cover operating expenses.
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