Nearly completed Le Jardin condo project files for bankruptcy
Le Jardin had $27.5M in assets and $7.1M in liabilities, according to its filing
Verzasca Group’s Le Jardin Residences boutique condo project in Bay Harbor Islands is nearly complete with the majority of units presold.
Yet, in an unusual move, the project filed for Chapter 11 bankruptcy reorganization in a U.S. Bankruptcy Court last week. By reorganizing, the project’s developer hopes to close on the units as part of a complicated legal maneuver.
Verzasca Group is developing the seven-story, 30-unit Le Jardin at 1150 and 1160 102nd Street.
The development group’s bankruptcy filing is tied to a lawsuit filed in Miami-Dade Circuit Court in 2017 alleging that the group owes money on an EB-5 loan. EB-5 is a federal program that allows foreign investors the opportunity to receive a green card in exchange for an investment of at least $500,000 in an American enterprise that creates at least 10 jobs.
The manager of the EB-5 lender, La Jardin Residences Lender, led by Alexey Burya, had filed a Lis Pendens against the property. A Lis Pendens is the notice of lawsuit that claims ownership in real estate. A Lis Pendens can sometimes make it more difficult for the seller to close on a deal.
Victor Kalman Rones, an attorney for the EB-5 lender, declined comment.
By filing for bankruptcy, Xavier A. Franco of Coral Gables-based McArdle, Perez & Franco, who represents two affiliates of Verzcaza Group, said the development group can expedite closings free of disputed claims and “fully and completely satisfy all of its allowed, legitimate creditors.”
But in an unusual twist, the project is actually not insolvent. It has $27.5 million in assets and only $7.1 million in liabilities, including a $5.9 million loan on the property, according to its bankruptcy filing.
Court documents also show that 18 out of the 30 units have already presold. Franco said the project has also received a temporary certificate of occupancy.
The South Florida Business Journal first reported the news about the bankruptcy filing.