via SFBJ by Brian Bandell
U.S. Bankruptcy Judge John Olsonrejected the attempt of a Chinese company to retain control of the shuttered Fashion Mall in Plantation and scheduled the property for auction.
The 32.1-acre site at 321 N. University Drive will head to auction on March 19 with a sale hearing in bankruptcy court the following day, said attorney Glenn Moses, of Genovese Joblove & Battista, who represents debtor trustee Kenneth A. Welt. Moses said they’ve already signed 75 confidentiality agreements and conducted 14 site tours with prospective bidders. CBRE is marketing the property.
Ram Real Estate in Palm Beach Gardens submitted a $24 million stalking horse bid, but Moses expects the bidding to go higher.
U.S. Capital/Fashion Mall and parent company Mapuche LLC both filed Chapter 7 liquidation in October at the direction of minority owner and manager Wei Chen. The filing came in the midst of litigation between Chen and China-based Tangshan Ganglu Iron & Steel Co., which owns 99 percent of Mapuche and claims to have invested more than $186 million into the property. It alleged that Chen misused its funds. A Broward Circuit Court judge ruled that Chen didn’t have sole control of the company.
Ganglu filed a motion to convert the case into a Chapter 11 reorganization and handle the redevelopment itself. The company hired Miami attorney and developer Andrew Hellinger as its development manager and stated its intention to find a U.S. partner. Ganglu deposited $10 million to show it was serious about funding the project, according to its court filings.
However, Judge Olson ruled that a Chapter 7 auction was the best way to go.
“Conversion to Chapter 11 would have brought significant risk and delay and the correct approach is to proceed with the sale procedure that we have set up,” Moses said. “Every creditor that appeared supported the trustee’s sales process, including the city of Plantation.”
Holland & Knight attorney Jose Casal, who represented Ganglu,said he wasn’t sure whether his client would appeal.
In addition to Ganglu’s claim, Mapuche and U.S. Capital owe a $12.1 million construction mortgage to GHJ Construction and contractor liens of $700,000.