Omaha nonprofit's bankruptcy filing has clear path after judge’s ruling

Print
Font Size:
Default font size
Larger font size

Posted: Saturday, October 26, 2013 12:00 am

The bankruptcy case involving the Omaha nonprofit that built a 264-unit apartment project in Florida can proceed, after a judge ruled the filing was not done in bad faith and that there is no indication of wrongdoing.

The owner of the mortgage on the apartment, built with the assistance of the U.S. Department of Housing and Urban Development, had objected to the April bankruptcy filing of the Waterstone at Panama City apartments, which cited the $25 million mortgage as the main liability.

The apartments were built by Omaha’s Tapestry Group, a nonprofit. Tapestry interim president and Omaha real estate developer Gene Wilczewski said in an email that he is thankful for the judge’s order and that his conduct and that of Tapestry were found to be proper.

The project’s mortgage holder, Lenox Mortgage, had argued that Tapestry’s board members had not authorized filing of the bankruptcy case and that Wilczewski operated a real-estate consulting company that is seeking to recoup proceeds from the bankruptcy.

This month, a judge in U.S. District Court in Omaha dispensed with the objections, clearing the way for the reorganization of Waterstone at Panama City’s finances under court supervision.

“After a complete review of all of the evidence submitted in support of the motion to dismiss, I do not find cause for dismissal and specifically do not find that Wilczewski or the debtor has acted in bad faith or that the bankruptcy filing was done in bad faith,” U.S. Bankruptcy Judge Timothy Mahoney wrote.

Lenox Mortgage declined to comment, said the company’s Omaha attorney, Brandon Tomjack.

Lenox Mortgage said in its court filings that the bankruptcy filing was rife with problems. Among them, Lenox said, was that a Wilczewski-affiliated company is seeking $722,000 from the bankruptcy for serving as a “consultant and market adviser.”

Tapestry, Lenox also argued, failed to disclose a federal contempt of court order for failing to pay a contractor who sued for unpaid work and won. The Waterstone bankruptcy, Lenox said, was filed to avoid foreclosure on the property. None of it, Mahoney wrote, amounts to much.

“I find that Wilczewski is deeply involved in every aspect of Tapestry and the debtor,” Mahoney wrote. “However, there is no evidence in any of the documents or depositions that his activities are in violation of the law or regulations of HUD or the State of Florida.”

Tapestry, whose website describes the organization as a tax-exempt charity founded to “lessen the burdens of government” through housing development, tapped a HUD lending or loan-guaranty program in building the apartments in 2008.

The group described the Waterstone project on its website as for people making too much money to qualify for low-income housing assistance but not enough to buy a home in the pricey coastal area of Florida.

Lenox argued in court filings advocating dismissal of the bankruptcy that the property is poorly maintained. Mahoney wrote that he found nothing to indicate that is the case.

Copyright ©2014 Omaha World-Herald. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald. To purchase rights to republish this article, please contact The World-Herald Store.


loading...

SPOTLIGHT »

Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.