Apex Realty Enterprises LLC, an affiliate of the Short North’s RMRW Ltd. development firm, filed for Chapter 11 bankruptcy Wednesday in Columbus, listing liabilities $10 million to $50 million and assets of less than $10 million.
Apex Realty principals declined to comment on the filing through an email from their Columbus attorney, Myron Terlecky. Columbus attorney Brian Laliberte, who represents several buyers trying to get deposits back, said the filing came the day before the first depositions in 10 lawsuits were due to begin.
“It’s a clear attempt to avoid answering for the fraud we allege they committed,” Laliberte wrote in an email to Columbus Business First.
That transaction has not closed, according to public records. Schiff did not immediately return messages seeking comment.
The Finance Fund’s Community Loan Fund New Markets II LLC affiliate is listed in the bankruptcy filing as a $5.1 million creditor, with $3.1 million of that considered secured debt. Unsecured creditors include the Columbus architectural firm of Berardi & Partners Inc. at $503,312. That debt is listed as “contingent” and “disputed” in the filing.
Apex Realty Enterprises built a string of Short North condominiums, but the company was undone by a project that never got off the ground.
Apex filed for bankruptcy this week, after failing to build its most ambitious project: the proposed 11-story Ibiza condominiums at N. High Street and Hubbard Avenue. The company listed assets of between $1 million and $10 million and debts of more than $10 million in its filings.
Creditors, including 60 people who put an estimated $1 million down on condominiums that were never built, will now take their case to bankruptcy court.
An attorney representing Ibiza investors also will continue to press his fraud case against the company, but now before a bankruptcy judge.
"The bankruptcy petition really only changes the forum in which we're going to pursue Apex and its partners and employees," said Brian Laliberte, who represents 17 clients who put down deposits on the project. "Our claims remain the same. We believe fraud occurred in the Ibiza development."
Apex and its sister company, ARMS Properties, unveiled Ibiza in 2006. It was the largest project tackled by Apex's four partners - Raymond Brown, Michael Council, Rajesh Lahoti and Wilbur Ischie - who also developed the Dakota and several smaller condominium projects.
Ibiza was to be a residential gem in the Short North: 135 condominiums in a gleaming tower with a roof-deck pool, concierge service, attached parking and a fitness center.
In early 2008, as the Columbus condominium market started its decline, the developer began taking 5percent deposits for the units, which sold for $159,999 to $1,549,999.
Laliberte's clients contend that Apex partners continued to accept deposits and present the condos as successful even though they knew the project had lost funding and would not proceed.
In an exhibit filed in one of his cases against Apex, Laliberte included a January 2010 email exchange between Council and Brown discussing how to respond to a client demanding his money back.
According to the filing, Brown wrote, "We should work on replies tomorrow."
Council responded: "Yes! We need a standard reply. We need to talk to (attorney) Tom Allen or someone as now we are going to start lying."
Laliberte said he thinks the principals of Apex and its related companies enriched themselves at the expense of condo investors.
Calls to Apex and ARMS offices went unanswered yesterday. Myron Terlecky, a Columbus lawyer who represents Apex in the bankruptcy filing, declined to comment.
After funding for the condominiums collapsed, Apex sought investors to convert the project into apartments. That effort failed as well, and last month, Columbus developer Schiff Capital Group took control of the site.
In addition to its condominium developments, Apex and its related entities have interests in several nearby properties including the Union Cafe, 782 N. High St.; Havana, 862 N. High; Axis Nightclub, 775 N. High; and commercial buildings in the 800 block of N. High.
Apex listed as its largest debt $5.1 million to the Community Loan Fund, a Columbus-based nonprofit group that helps fund projects in low-income areas. Other creditors include Berardi & Partners architectural firm ($503,312), Walker Parking Consultants ($97,591), the Simon Group Limited Partnership ($74,750) and Ruscilli Construction Co. ($40,000).
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