The developer of the Landmark luxury condominiums in Greenwood Village was unable to meet the first benchmark in his bankruptcy case requiring him to pay his lender $10 million in proceeds from sales of the units.
Zack Davidson paid Hypo Real Estate Capital Corp. $5.8 million from the sale of nine condos over the past six months. He was supposed to pay Hypo $10 million by May 20.
Davidson’s companies filed for Chapter 11 bankruptcy protection in August. Davidson filed for personal bankruptcy in February.
Under terms of a Debtor in Possession loan agreement reached in the Chapter 11 case in October, Hypo would continue lending money to the project so it could be completed, as long as Davidson met certain benchmarks.
Under terms of the DIP agreement, the default gives Hypo the right to foreclose on the property. Hypo also is no longer required to make loans to the project.
Instead, the lender wants to enter a “forbearance agreement” with Davidson and appoint a chief restructuring officer to manage the project, according to a motion filed late Friday. Hypo also wants Davidson to transfer the project to it.
“We are working with Hypo to flesh out a smooth transition of ownership,” Davidson’s attorney Michael Pankow said at a U.S. Bankruptcy Court hearing Tuesday.
Various parties who have not been paid for work on the project told the court they have not had sufficient time to review the arrangement and asked Judge Michael Romero to delay his decision on the matter.
Romero agreed and set a Monday deadline for those parties to file their objections. He plans to schedule another hearing for a future date.
“The forbearance agreement may be in the best interest, but I’m nervous about approving it without giving everyone a chance to discuss it with their clients,” Romero said.
The Landmark development features two condo towers and a retail district with shops, restaurants, a movie theater and Comedy Works South.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
