The developers behind a high-rise project that stalled out in River North are jumping through hoops to block their lenders from foreclosing on the property.
Entities with ties to Symmetry Property Development, a venture of New York intellectual property attorney Jeffrey Laytin and Chicago investor Jason Wei Ding, filed for Chapter 11 bankruptcy protection Wednesday, leading to the last-minute cancellation of a sheriff’s sale of the parcel that had been scheduled for Thursday, Crain’s reported.
The developers’ last-ditch effort to save their asset at the northeast corner of Wabash Avenue and Superior Street extends a four-year legal battle with their lenders, which are ventures led by New York-based Madison Realty Capital and Arena Investors.
Laytin and Ding proposed a 60-story condominium-and-hotel tower for the site in 2017. Set to rise 725 feet, it would have been the tallest building to sprout up in River North since 2008.
The venture raised about $50 million from 90 Chinese investors through the EB-5 program — a federal initiative that grants U.S. residency to overseas citizens who invest in qualified projects. But officials blocked the proposal, leaving the developers with nothing but a brigade of angry investors and ensuing legal trouble. The investors are still waiting to be paid back.
The lenders filed a foreclosure suit in 2019, claiming the Laytin-Ding venture defaulted on more than $22 million in debt. It appeared that the saga would come to an end after a Cook County judge in March approved a plan to sell the site through a sheriff’s auction. That auction was scheduled for yesterday, with an opening bid of $9 million, but the Chapter 11 filing thwarted the foreclosure.
“These filings are an illegitimate use of Chapter 11 which is meant for reorganizing viable businesses,” Doug Litowitz, a Deerfield-based attorney who represents the Chinese investors, told the outlet. “Chapter 11 is not meant for companies who have no assets except underwater real estate. This strikes me as an abuse of the bankruptcy laws to block a legitimate foreclosure.”
Ding and Laytin claim they’ve done nothing wrong and are sincerely trying to repay the investors who signed a $27.5 million settlement agreement in 2020. In addition, the developers said they would reimburse the investors with proceeds from a $250 million construction loan from a lender in Bahrain.
That loan never happened, and now Symmetry’s lawyer, Daniel Hildebrand, may face repercussions from a judge in the case for not more closely investigating his client’s questionable claims that it had a foreign lender lined up to help pay back the investors, the outlet reported.
— Quinn Donoghue
Read more
Commercial
Chicago
Failed River North development site hits auction block
Development
Chicago
Dubai investigator probes failed Chicago project sponsor’s $250M loan claims
Chicago
Musa Tadros settles debt with $20M bankruptcy sale of Chatham Village Square