Days after his indictment on felony fraud charges last week, JMJ Development CEO Tim Barton was dealt another loss in bankruptcy court.
On Wednesday, Barton lost control of a Turtle Creek site where he once planned to build a high-rise luxury condo tower and a Mandarin Oriental hotel. Barton had fought tooth and nail to hold on to the 2-acre site at 2999 Turtle Creek Boulevard, according to the Dallas Business Journal.
U.S. Bankruptcy Judge Scott Everett granted the heart of a motion by the secured lender, HNGH Turtle Creek, giving the LLC full ownership of the property. Barton has already filed a notice of appeal to the court’s final order.
Officially, the Turtle Creek property is not tied to Barton and his associates’ alleged $26 million Ponzi scheme. It is not at all involved in the proceedings with either the U.S. Securities and Exchange Commission or the U.S. Attorney for the Northern District of Texas. However, 2999TC Acquisitions LLC, the entity behind Barton’s redevelopment of the Turtle Creek property, did have a history of financial trouble.
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In 2019, plans were announced to build a luxury hotel and residential condominiums at a cost of roughly $395 million at the Turtle Creek address. By the end of 2020, 2999TC Acquisitions defaulted eight times under its $32.5 million loan with HNGH, which gave Barton’s firm a “final chance” to pay back the loan in full by October 29, 2021. HNGH then played the “deed in lieu of foreclosure” card. So, should Acquisitions fail to repay in full by the deadline, HNGH would take ownership of the Turtle Creek property.
In the end, Barton’s 2999TC Acquisitions filed for Chapter 11 bankruptcy just before the “deed in lieu” was recorded, triggering litigation wherein HNGH asserted its rights to the property.
During the court proceedings, Acquisitions was given another deadline of March 15, 2022. When Barton’s LLC missed that deadline, it requested another set for May 31, which it also missed, according to Judge Everett’s 49-page order.
“And here we are once more,” the order says. “The Debtor — blaming HNGH — missed the May 31 deadline and seeks yet another extension.”
Upset at the delays, HNGH filed a motion to enforce its ownership rights under the agreed court orders, only to have 2999TC Acquisitions contest the motion in a hearing that lasted more than 50 hours and took 15 nonconsecutive days stretched over two months, Everett’s order says.
In its latest request for an extension, Barton and 2999TC alleged that HNGH was a “predatory” lender — an argument Everett rejected.
— Maddy Sperling