The Tiber was approved for temporary funding, but still has disputes to settle.
A long-delayed West End condo project got the green light this week for temporary funding to help get it back on track, but it’s unclear whether the former contractor and noteholder for the development will go along with a pending plan for a larger loan needed to complete construction.
A federal bankruptcy judge on Wednesday approved a plan for interim financing for The Tiber, a high-end condo development that’s been in limbo at Libbie and Guthrie avenues since a dispute arose between its owners and general contractor.
The interim financing is an unsecured loan of about $89,000 from eight of the Tiber’s condo buyers, who have been waiting more than three years for the project to be completed.
The financing approval is part of the Chapter 11 bankruptcy case of Tiber Partners LLC, the entity created to develop the Tiber. The company was put into Chapter 11 protection last month after several of its future residents tried to force it into Chapter 7 bankruptcy.
The bankruptcy proceedings nixed a foreclosure auction sought by Libbie Guthrie LLC, an entity controlled by John George, the former contractor for the Tiber and one of the original partners on the development. Libbie Guthrie bought the Tiber’s $6.27 million loan from its original lender, Middleburg Bank, in April.
The condo project broke ground in 2013 after Scott Boyers, Jennifer Fergusson, Berkeley Fergusson and George formed Tiber Partners. Plans called for a 15-unit condo development, 13 of which were pre-sold, according to a court filing. George’s construction company, John K. George & Co., was the contractor until a dispute arose over the construction schedule and the matter was taken to court.
The motion for interim financing was submitted by attorney Loc Pfeiffer of Kutak Rock, who represents the trustee overseeing Tiber Partners’ bankruptcy case, Peter J. Barrett.
“There is no cash we can work with,” Pfeiffer said at the hearing, adding the bridge loan was “high risk.”
“I wish we had another way to do this, but we have no other choice,” he said.
Pfeiffer said the loan is needed to pay for costs of the bankruptcy proceedings and work needed on the property to secure an additional loan of more than $6 million. That money would allow construction to be completed and for the repayment of the bridge loan.
Pfeiffer sympathized with the hopeful residents now backing the loan for unfinished condos they made deposits on.
“It’s brave,” he said. “These folks are already out of money.”
Expected expenses included a $1,600 bond for the trustee, $15,000 for Tiber Partners’ counsel, $3,400 for insurance, $300 monthly storage payments, $25,000 for counsel handling Tiber Partners’ civil case with John K. George & Co., $5,000 for an accountant, more than $15,000 for interest on Tiber Partners debt, and an additional $20,000 for an appraisal, survey and environmental reports to get a bank loan.
“We know that the margins are very tight,” Pfeiffer said. “We believe we can finish this project.”
Before approving the motion at Wednesday’s hearing, Judge Kevin Huennekens questioned Pfeiffer about the eventual bank loan that will be used to pay back the condo buyers and finish the project. Since George’s Libbie Guthrie holds the note for the Tiber, it can object to a bank loan that might subordinate the priority of its lien.
Libbie Guthrie has been represented by attorney Courtney Moates Paulk of Hirschler Fleischer. She could not be reached for comment.
Judge Huennekens also asked about the timing of the bridge loan and whether a replacement builder is lined up to resume construction. Pfeiffer said the bridge loan should be executed in about 30 days and that a builder has been identified but nothing has been made official.
The Tiber was approved for temporary funding, but still has disputes to settle.
A long-delayed West End condo project got the green light this week for temporary funding to help get it back on track, but it’s unclear whether the former contractor and noteholder for the development will go along with a pending plan for a larger loan needed to complete construction.
A federal bankruptcy judge on Wednesday approved a plan for interim financing for The Tiber, a high-end condo development that’s been in limbo at Libbie and Guthrie avenues since a dispute arose between its owners and general contractor.
The interim financing is an unsecured loan of about $89,000 from eight of the Tiber’s condo buyers, who have been waiting more than three years for the project to be completed.
The financing approval is part of the Chapter 11 bankruptcy case of Tiber Partners LLC, the entity created to develop the Tiber. The company was put into Chapter 11 protection last month after several of its future residents tried to force it into Chapter 7 bankruptcy.
The bankruptcy proceedings nixed a foreclosure auction sought by Libbie Guthrie LLC, an entity controlled by John George, the former contractor for the Tiber and one of the original partners on the development. Libbie Guthrie bought the Tiber’s $6.27 million loan from its original lender, Middleburg Bank, in April.
The condo project broke ground in 2013 after Scott Boyers, Jennifer Fergusson, Berkeley Fergusson and George formed Tiber Partners. Plans called for a 15-unit condo development, 13 of which were pre-sold, according to a court filing. George’s construction company, John K. George & Co., was the contractor until a dispute arose over the construction schedule and the matter was taken to court.
The motion for interim financing was submitted by attorney Loc Pfeiffer of Kutak Rock, who represents the trustee overseeing Tiber Partners’ bankruptcy case, Peter J. Barrett.
“There is no cash we can work with,” Pfeiffer said at the hearing, adding the bridge loan was “high risk.”
“I wish we had another way to do this, but we have no other choice,” he said.
Pfeiffer said the loan is needed to pay for costs of the bankruptcy proceedings and work needed on the property to secure an additional loan of more than $6 million. That money would allow construction to be completed and for the repayment of the bridge loan.
Pfeiffer sympathized with the hopeful residents now backing the loan for unfinished condos they made deposits on.
“It’s brave,” he said. “These folks are already out of money.”
Expected expenses included a $1,600 bond for the trustee, $15,000 for Tiber Partners’ counsel, $3,400 for insurance, $300 monthly storage payments, $25,000 for counsel handling Tiber Partners’ civil case with John K. George & Co., $5,000 for an accountant, more than $15,000 for interest on Tiber Partners debt, and an additional $20,000 for an appraisal, survey and environmental reports to get a bank loan.
“We know that the margins are very tight,” Pfeiffer said. “We believe we can finish this project.”
Before approving the motion at Wednesday’s hearing, Judge Kevin Huennekens questioned Pfeiffer about the eventual bank loan that will be used to pay back the condo buyers and finish the project. Since George’s Libbie Guthrie holds the note for the Tiber, it can object to a bank loan that might subordinate the priority of its lien.
Libbie Guthrie has been represented by attorney Courtney Moates Paulk of Hirschler Fleischer. She could not be reached for comment.
Judge Huennekens also asked about the timing of the bridge loan and whether a replacement builder is lined up to resume construction. Pfeiffer said the bridge loan should be executed in about 30 days and that a builder has been identified but nothing has been made official.