Court OKs selling off Carmel firm’s property holdings

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A Hamilton County court has approved the sale of nine central Indiana properties tied to Carmel-based CFS Inc., which is facing a state securities fraud lawsuit.

Among the highest profile: an office-and-retail building at 12821 E. New Market St. in the Village of West Clay, which sold for $1.4 million.

The so-called Brenwick Building, which formerly housed CFS offices in addition to commercial tenants, was set for a sheriff’s sale in October, but that debt was repaid with sale proceeds, receiver Mary Slade said in an email.

As IBJ reported last year, the Indiana Secretary of State’s securities division filed a complaint in Hamilton Circuit Court against attorney Charles Blackwelder, his son Chad Blackwelder, and his daughter Cara Grumme. The three own CFS Inc.

CFS described itself as a licensed brokerage that provided “real estate investment opportunities,” according to the company’s website at the time. The owners were accused of selling $10.4 million in ownership interests in rental properties to elderly clients and misappropriating their funds.  The case is still pending.

Since Slade—an attorney at Carmel law firm Drewry Simmons Vornehm LLP—and co-receiver William E. Kelley Jr. were appointed in February 2013, they have investigated 48 properties with CFS ties, mostly in Indiana.

Claims filed by investors and debtors totaled more than $23.3 million, Slade said. Court records indicate CFS oversold interest in some properties by as much as 48 percent.

A court-approved property management company is handling utilities, maintenance and rent collections for holdings that have not yet sold. Slade said Judge Paul Felix has approved new listing prices for 18 properties.

Slade said the court has approved two residential sales agreements, and another two are awaiting court approval. Three of the residential properties have leases that expire in 2015 and 2017.

These holdings also have sold for the following court-approved prices, Slade said:

— 13853 Waycross Drive, Fishers: $122,500
— 8437 Ardennes Drive, Fishers: $169,000
— 1481 Jason Road, Greenfield: $250,000
— 12487 Springbrooke Run, Carmel: $260,000
— 13913 Royal Saddle Drive, Carmel: $287,500
— 1474 Sweet Saddle Court, Carmel: $290,000
— 12856 Sheffield Blvd., Carmel: $475,000
— 4905 E. 82nd St., Indianapolis: $2,350,000 (a mortgage in foreclosure was paid off)

The 82nd Street property is home to the Ethan Allen Design Center.

Two other Village of West Clay buildings owned by CFS are not subject to Slade’s oversight.

Old National Bank foreclosed on the Sterkx Building at 12701-12703 Meeting House Road—the onetime home of Blackwelder family-run Chappie’s restaurant—and sold it last year at a sheriff’s sale for $950,000.

Huntington National Bank is still pursuing a foreclosure of the former Harvest Fresh Market location at 12770 Horseferry Road, Slade said. The property was removed from the receivership because it was used to secure loans on other properties that also are being foreclosed upon.

The court will address how property-sale proceeds should be distributed following a June 9 claims-allocation hearing.

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