Mediation to Save Building From Bank Foreclosure Listings

by Donald Hanz on Foreclosure Help

Fifth Third Bank and Kevin Azzouz, developer of the Veranda Park building located in Orlando, Florida, was ordered by U.S. Bankruptcy Judge Karen Jenneman to find solutions to save the 55-unit property from bank forclosure listings.

The case is related to the foreclosure auction and bankruptcy filing on the MetroWest Project. Jenneman ordered Azzouzz and his company and Fifth Third Bank to arrange a dispute mediation to resolve the issue surrounding the offices located at the Veranda Park development.

A Chapter 11 bankruptcy was filed in Florida by Azzouz in behalf of the company which owns his commercial property, VP Phase IV Ltd. He filed a bankruptcy a day before the building will be placed on bank foreclosure listings for auction.

According to court records, the building owed Fifth Third Bank about $15.3 million in mortgage loan. Last May 7, the said bank submitted a motion requesting Jenneman to either dismiss the case of bankruptcy or permit the foreclosure auction to continue.

The bank said that the building owner filed for bankruptcy just to prevent the inclusion of the building on bank foreclosure listings. It added that VP Phase IV, being a single-asset entity, has no right to restructure based on Chapter 11.

Norman Hull lawyer of VP Phase IV explained that Jenneman’s decision permits the bankruptcy filing to push through. The court ordered Azzouz to re-activate all utilities in the building and to submit proof of insurability to the bank not later than June 29.

Hull also said that Azzouz has been ordered by the court to file a reorganization plan and submit it by August 5.

Meanwhile, some buildings also located in the Veranda Park development are facing numerous problems, including pending foreclosure sales, bankruptcy, liens and lawsuits. Commercial Ventures Orlando LLC filed a bankruptcy petition in relation to its $1.5 million and $5,000 debt to secured and unsecured creditors.

On the other hand, Chapter 7 Bankruptcy trustee Gene Chambers filed a lawsuit for breach of contract against the firm, VP Phase III in order to recover the $41,424 deposit paid by an individual to VP Phase for a residential condominium.

Furthermore, the 157-unit condominium building, the Residence at Veranda Park, is next to be added on bank foreclosure listings for auction on July 14. VP Phase III LLC, Azzouz’s ownership entity, owes $59.7 million to Regions Bank and Wells Fargo/Wachovia Bank NA.