Tupanjac’s last-second bankruptcy scuttles $16M Highwood foreclosure sale

Branko Tupanjac is facing fire on multiple fronts with his suburban Chicago development projects.

In the latest complication for the long-delayed repositioning of a once-grand North Shore hotel property at 700 Sheridan Road in Highwood, an LLC controlled by Tupanjac filed for bankruptcy protection in Illinois court this month, just hours before a foreclosure sale by the Lake County sheriff on behalf of a lender, according to public records.

The developer’s move into bankruptcy scuttled the foreclosure sale, enraging the lender, Midland States Bank, that has fought for years to get repaid the nearly $16 million it loaned in 2018 to Tupanjac and his partners in the LLC, which the bankruptcy filing identifies as Elias Abubeker and Min Ouyang. The development group was supposed to use the funding to convert the hotel, which has been shuttered since 2006, into a 98-unit senior lifestyle multifamily asset, and the city of Highwood has approved a grocery store to be built alongside it.

Instead, Tupanjac’s team barely got started doing any of the required work for the project in the five years since getting the loan, and the property remains fully vacant today, Midland alleged last week in its request to have the borrower’s petition for bankruptcy dismissed. The bank claimed the LLC is seeking bankruptcy protection in “bad faith,” adding that the developer has “no prospects for reorganization and no ongoing business to preserve,” and made the filing “solely to delay the culmination of foreclosure proceedings scheduled for the next day.”

Tupanjac couldn’t be reached, and an attorney representing his LLC in bankruptcy court did not return requests for comment.

“The city of Highwood has worked diligently for a decade to improve the appearance of the property,” city manager Scott Coren told The Real Deal. “The city’s approval recognizes the desirability of senior lifestyle housing units and a grocery store at this location.  We look forward to working with the owner to bring this vision to Highwood.”

The former hotel property isn’t the only in the Chicago area where the developer is facing financial and legal trouble.

Earlier this year, Tupanjac was hit with foreclosure complaints and mechanic’s liens alleging he hadn’t paid more than $4 million collectively to a lender and several contractors hired by the developer to build a 100-unit apartment building at 401 Algonquin Road in the northwest suburb of Fox River Grove, the Northwest Herald reported.

Further north, Tupanjac is being sued for a money judgment in Milwaukee County court by an LLC that previously sued him in a foreclosure case. While details of that case were not readily available in online court filings, the foreclosure case was closed and the suit for the judgment is still moving through court, according to public records. Attorneys representing the plaintiff and Tupanjac in those cases didn’t return requests for comment.

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Back in Highwood, Midland hopes to be able to reschedule a foreclosure sale of the property before the end of the year, at which point it’s likely to take a substantial loss on the debt it issued to Tupanjac’s venture.

The Moraine Hotel was once a vacation spot for wealthy Chicagoans in the first half of the 20th century until it was torn down and rebuilt as a different hotel in the 1970s. It was appraised at a little more than $9 million this summer, the bank’s court filings show, or less than two-thirds of the loan issued for the stalled redevelopment.

A hearing in the bankruptcy case is scheduled for Oct. 18.