Trouble continues to mount for Chicago developer Marty Paris.
Less than a month after he filed for bankruptcy, on Feb. 27, a lender seeking to foreclose on a building Paris owns is going after his personal assets to cover the costs of the $26 million loan that’s in default.
When Paris refinanced with a lender affiliated with Bridge Investment Group, in September 2020, he signed a personal guarantee to secure the loan. It states that the bank can go after his personal assets following certain “triggering events,” such as a bankruptcy filing.
The lender sued in the Southern District of New York on March 11, seeking $29 million from Paris to cover the loan, interest and fees.
The lender filed a foreclosure lawsuit in December against Paris’ firm Sedgwick Properties over missed mortgage payments on the 69-unit apartment complex, at 301 West North Avenue in Old Town. At the time, the personal guarantee had not been triggered.
The lender is not the only one seeking to settle debts with Paris. He was a week into a stint in Cook County Jail, over unpaid debt he owed to his ex-wife, when the foreclosure was filed.
Paris argued before Cook County Circuit Judge Abbey Romanek — who found him in contempt of court and ordered his jailing while presiding over their divorce — that his net worth is not $20 million, as his ex-wife Kerry Paris has claimed. He has been ordered to pay off $1.6 million in legal bills amassed during the divorce, which started in 2016, but he’s said he can’t afford to settle the debts.
He was released Jan. 5 after putting $150,000 toward the unpaid debts to his ex-wife and was subjected to electronic monitoring while awaiting his next divorce hearing.
Paris declined to comment.
The recent foreclosure and stint in jail were the latest in a string of legal woes for Paris.
His firm, Sedgwick, was already facing foreclosure in west suburban River Forest, where the village has revoked a building permit for Lake & Lathrop, a $20 million condo development he planned in its downtown area.
Contractors claimed that they had gone unpaid for the minimal work that had been performed on the site and were jousting with Sedgwick and another lender that filed to foreclose on the developer. An affiliate of Wintrust is seeking to take over the Lake & Lathrop development site after alleging Sedgwick didn’t pay off a $20 million line of credit drawn upon to start construction.
While Sedgwick completed the seven-story North Avenue project after starting construction in 2016, it also hit snags.
Sedgwick’s partner in the apartment development, HQ Capital Real Estate, sued in 2019. HQ Capital alleged 301 West North’s construction was delayed more than two years and encountered cost overruns and mechanic’s liens.
A few blocks south in the River North area, at the northwest corner of Erie and LaSalle Streets, Sedgwick is marketing high-end rentals, at an average cost of $10,000 a month, in a 14-story housing development it built — also amid some delays. It previously planned to build condos for sale at the property.
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