The North Texas Bankruptcy Court has found
Indicted JMJ Development CEO Tim Barton was found in contempt of court by the U.S. Bankruptcy Court for the Northern District of Texas for attempting to block the sale of a property that the company defaulted on over four years ago.
The finding stems from a lawsuit by JMJ in relation to the sale of about 31 acres of property in Plano, which the court claims JMJ cannot interfere with due to the provisions of an agreement signed by JMJ and all associated parties.
The Plano case is unrelated to the alleged $26 million fraud case that led to his Barton’s indictment last month, and unconnected to his recent loss of a Turtle Creek property in a separate bankruptcy case.
According to filings, the court found JMJ and Barton in contempt for attempting to oppose the sale of a Plano property, which JMJ previously invested in as a creditor for a project to build a senior living facility.
The court accused JMJ of bringing up re-litigation issues on the property that should have been brought up previously and are invalid anyway due to legal obligations that JMJ agreed to years ago.
JMJ’s attorney declined to comment, and a spokesperson for Barton did not return calls for comment.
The case involves a plot of land acquired by a joint venture aiming to build a senior-living facility, and JMJ invested a controlling interest in a new venture, Park Vista Seniors, LLC, to do just that. But the original joint venture holding the land filed for Chapter 11 bankruptcy in November of 2017, and the trustee authorized the JMJ-controlled Park Vista Seniors to purchase the property, provided the sale went through by the end of the year.
When Park Vista Seniors failed to close the deal by then, the court approved the sale of the property to North Carolina-based Hoss Holdings, LLC, and neither JMJ nor Barton objected.
By early 2018, all parties involved — including JMJ — signed off on a settlement agreement and discharge injunction, which prohibited creditors from taking any action designed to collect a discharged debt — such as filing a lawsuit.
Which is exactly what JMJ did on January 18, 2022, which the court claims was done with the intent of acquiring the property from the new owners.
The court ruled on October 6 that the lawsuit was a violation of legal obligations JMJ had previously agreed to before the court, thus constituting contempt.
Future proceedings are expected.
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