Friday, May 24, 2002
Erpenbeck condos unit files Ch. 11
By James McNair, firstname.lastname@example.org
and Patrick Crowley, email@example.com
The Cincinnati Enquirer
Already facing a wave of civil lawsuits and a criminal investigation, the Erpenbeck Co. set foot on another legal stage Thursday: U.S. Bankruptcy Court.
The Erpenbeck subsidiary building the Chestnut Park condominiums in the Aston Woods development in Miami Heights filed for protection from creditors under Chapter 11 of federal bankruptcy law. The move shelters the subsidiary, Chestnut Park Builders, from creditors while placing its fate with Bankruptcy Judge Burton Perlman.
The FBI is investigating the Erpenbeck Co. for bank fraud, although no charges have been filed. Home buyers are coping with numerous legal issues overshadowing their ownership.
Only about half a dozen of the Chestnut Park condos are occupied. The rest of the 30 or so units are in various stages of completion. The project sits alongside the Aston Oaks Golf Course off Bridgetown Road in western Hamilton County.
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In the filing with the U.S. Bankruptcy Court for Southern Ohio, Chestnut Park Builders didn't provide specific assets or liabilities, but said it owes $5.1 million to its construction lender, PNC Bank. It also asks the court to take bids for the unfinished portion of the 25-acre project, starting with an offer from Towne Development Group Ltd. for $4.75 million.
Towne Development is related to Towne Properties, the Cincinnati company that provides maintenance services to many Erpenbeck developments. Philip Montanus is the managing partner of both.
Erpenbeck Co. president Jeff Erpenbeck said the deal calls for Towne to honor consumers' purchase agreements and down payments.
In order to avoid a lengthy court process and to protect the consumers at Aston Woods, it was necessary to structure the sale of the project to a buyer who could expeditiously complete construction of the Aston Woods units, Mr. Erpenbeck said in a statement.
In a brief interview at the company's Edgewood office Thursday afternoon, Jeff Erpenbeck, who has been operating the firm since the resignation of his brother A. William Bill Erpenbeck in March, said the company is attempting restructurings at many of its other residential developments.
But every lender is different, every situation is unique, Mr. Erpenbeck said. We're trying to restructure our various developments, but it's going to take some time.
Mr. Erpenbeck said he could not say for sure if the other projects will require a trip through bankruptcy.
That worked in this particular development, but we'll have to wait and see if the same thing works elsewhere, he said.
Mr. Erpenbeck would not divulge details about any pending restructurings or how many of those deals might be in the works.
The company said it has also reached an agreement with PNC Bank to release mortgages still encumbering condos already sold in Chestnut Park.
Although PNC had not initiated foreclosure proceedings against Chestnut Park, the project is one of many Erpenbeck developments in the Tristate that have been idled by the company's financial problems.
According to the bankruptcy filing, Chestnut Park ceased operations May 1 and has no employees. Its assets fall between $1 million and $10 million, as do its liabilities, and the number of creditors ranges from 50 to 99.
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