Bank: Aspenwalk developer reneged on loan | AspenTimes.com

Bank: Aspenwalk developer reneged on loan

Rick CarrollThe Aspen TimesAspen, CO, Colorado

ASPEN – Bank of America has taken legal steps to have a person appointed to oversee financial aspects of the proposed Aspen Walk housing development.On Friday the bank filed a complaint for an appointment of receiver, alleging that Minnesota-based PFG Aspenwalk LLC has defaulted on a loan by not making monthly payments since October 2008. The complaint alleges that as of Oct. 11, Aspenwalk owes $5.485 million to Bank of America, in addition to $1.4 million in interest, and $217,559 in other costs. The debt stems from a pre-development and construction loan totaling $45.42 million, which Bank of America granted to Aspenwalk in December 2007, the complaint says. Aspenwalk has a pending application before Aspen City Council that seeks to demolish the dilapidated housing developments at 414 Park Ave. and 404 Park Circle so it can build 14 free-market condominium units, 24 employee-housing units and 53 underground parking spaces. The proposal goes back to City Council on Nov. 28. Aspenwalk’s local representative, Aspen planner Stan Clauson, was not available for comment Monday. Aspenwalk is also in default because Petters Real Estate Group, which owns 67.5 percent of the LLC, is controlled by convicted Ponzi schemer Thomas Petters, who is serving a 50-year prison sentence, the complain says. Part of the loan agreement stipulated that Aspenwalk, as guarantor, could not have any ties to criminal activity or an ongoing criminal investigation, according to the complaint.Other recent developments also have put Aspenwalk in default, including the LLC’s Chapter 11 bankruptcy filing in September 2010 in Minnesota, and Petters’ assets being put in receivership through an additional court action in Minnesota, the complaint says. Bank of America’s complaint was filed in Pitkin County District Court. It came after a Sept. 1 ruling, made in the bankruptcy case. That ruling lifted a stay that prohibited Bank of America from taking any court action against Aspenwalk, the complaint says. Bank of America’s complaint asks the court to appoint Denver-based receivership firm Cordes & Co. As of 3:30 p.m. Monday, a judge had yet to make a ruling. rcarroll@aspentimes.com

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