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Dallas

Alleged DFW slumlords delay lawsuit with bankruptcy filing

City of Mesquite sued the out-of-state owners of Hillcrest Apartments for widespread, chronic code violations

Code Capital Partners' Jared Remington and Hillcrest Apartments in Mesquite, TX (LinkedIn, Google Maps, Getty)
Code Capital Partners' Jared Remington and Hillcrest Apartments in Mesquite, TX (LinkedIn, Google Maps, Getty)

The alleged slumlords of Hillcrest Apartments won’t face the city in court until their bankruptcy is resolved.

The city of Mesquite sued the out-of-state owners of the complex in February for widespread, chronic code violations. On July 29, however, owner entity CC Hillcrest LLC filed for Chapter 11 bankruptcy. The filing came just days after lawyers for the landlord asked a judge to appoint a third-party to oversee what they called a “highly politicized” case.

Last week, court records showed the city’s case against the landlord was inactive, and a court coordinator confirmed to the Dallas Morning News that the bankruptcy case stays all other proceedings until it is resolved.

On Monday, the owners’ lawyer, Joyce W. Lindauer, issued a statement that CC Hillcrest felt it “had no choice” but to file for bankruptcy. The company bought the 1970’s-era apartment complex from a small firm from Alabama.

“Given the difficulties of obtaining a fair property improvement and repair agreement and further issues surrounding financing to facilitate property improvements, the LLC felt it had no choice but to protect and preserve its asset by filing for Chapter 11 Bankruptcy protection to provide a path forward that includes continuing to address the concerns of the residents,” according to a statement from Lindauer.

While CC Hillcrest’s bankruptcy filing will delay the city’s case against the landlord, Mesquite City Manager Cliff Keheley said in a statement that the bankruptcy case “does not impact the City’s commitment to ensuring repairs and maintenance continue at Hillcrest Apartments,” and that law enforcement will “continue to hold the owner accountable for ongoing neglect of this property.”

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However, residents of the Hillcrest Tenants’ Union, who petitioned the court to join the city’s suit in June, are less confident about the future of the city’s lawsuit.

“To be perfectly honest, I feel like nothing’s probably changed,” said Brittany Jones, a four-year resident of Hillcrest Apartments. “Hillcrest found another loophole and another strategy to prolong stuff that was in their favor.”

“Legal Aid is working to understand the impact that the bankruptcy filing will have both on the state court case and the individuals that are not a part of this case — the everyday people who are dealing with the horrid conditions at those apartments,” said Julius Jenkins, an attorney with Legal Aid of Northwest Texas who is representing clients of the Hillcrest Tenants’ Union. “And we will do our best to minimize the impact of the bankruptcy filings on those people.”

In addition to the city’s suit, Hillcrest’s owners are facing two lawsuits from a former tenant and a visitor who say they were injured after apartment ceilings caved in on them in July 2019.

CC Hillcrest is managed by the private equity firm Code Capital Partners in Windermere, FL. Jared Remington is named in the city’s suit as the manager of the firm.

— Maddy Sperling