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Dispute over Uptown Business Center in SoBro gets messier

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A months-long court feud over a retail building at the southwest corner of 49th Street and College Avenue in Indianapolis has become even more heated now that the owner has sought bankruptcy in an attempt to delay foreclosure on the structure.

The dispute started in October when the lender tried to take possession of the Uptown Business Center, whose owner, Leif Hinterberger and his partners, owed $802,500 under the defaulted mortgage, according to the suit filed in Marion Superior Court.

But late last month the fight over ownership spilled into federal court when Hinterberger filed to reorganize the assets of Uptown Business Center LLC under the protection of Chapter 11 bankruptcy.

In the filing, Hinterberger lists owner assets of nearly $1.4 million, or the assessed value of the building whose tenants include the Upland Brewery tasting room and The Paw Patch Veterinary Hospital.

Liabilities total about $1.1 million, the bulk of which is a $761,917 mortgage to Alpha Capital LLC. The bankruptcy filing also names Arturo DeRosa, Donald C. Arbogast Jr., Dan Fortune and Steve LaCross, who hold second mortgages on the property.

Alpha Capital bought the original mortgage on the building from Minnesota-based PSB Credit Services Inc. about the time foreclosure proceedings began, according to court documents.

Hinterberger says he’s willing to pay the debt but argues that PSB Credit Services is still the rightful owner of the mortgage, not Alpha Capital. He expects the bankruptcy proceeding to clarify the ownership issue.

Hinterberger specifically accuses Bryan Chandler, a principal of Alpha Capital, and his partners of trying to undermine his attempt to resolve the debt and instead take possession of the business center.

“We believe there have been attempts to hide their true motives, manipulate the legal process and take our properties, our assets, and our long-term community and economic investments,” Hinterberger said in an email.

Chandler, a local real estate investor, did not return phone calls seeking comment. But he and Hinterberger have crossed paths before.

Hinterberger in 2011 lost control of six properties across the street from the Uptown Business Center on the northwest corner of the intersection of 49th and College, where he had hoped to build a $19 million mixed-use project called The Uptown.

The properties on the northwest corner are now controlled by Strategic Mortgage Funding, a company operated by Chandler that invests in distressed mortgages.

A lawyer for Alpha Capital dismissed Hinterberger’s July 29 bankruptcy filing as a last-ditch effort to stall foreclosure on his Uptown Business Center.

“It’s our belief that it was put in place to delay procedures,” said Amy VonDielingen, a partner at Wooden & McLaughlin LLP.

A court document filed by Alpha Capital supporting its attempt to foreclose says Alpha has made concessions in an attempt to resolve the matter without taking possession of the property.

Alpha said that it agreed to delay foreclosure for three months provided that Hinterberger and his partners made payments in December and January of $2,500 per month. Alpha also agreed to accept $550,000 to settle the mortgage default, an amount nearly $250,000 less than what is owed on the unpaid principal, according to court documents.

“The forbearance agreement gave defendants exactly what they claimed they wanted — time to pay off the loan,” lawyers for Alpha wrote in a July court motion. “Despite the plain and unambiguous terms, defendants now challenge Alpha’s right to enforce the note and mortgage. But defendants cannot put the toothpaste back in the tube.”

In a phone interview, Hinterberger’s lawyer, Rob Cheeseborough, repeated their stance.

“My client wants to pay every dollar to the ultimate holder of that note, not [to] the alleged holder,” Cheeseborough said. “The [chapter] 11 will make it so he pays the appropriate party.”

Court documents show that Hinterberger bought the building in 2005 for $250,000 and so far has spent $1.2 million on renovations.

This story was originally published by Indianapolis Business Journal at IBJ.com.


 

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  1. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  2. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

  3. to answer your questions, you would still be practicing law and its very sad because we need lawyers like you to stand up for the little guy who have no voice. You probably were a threat to them and they didnt know how to handle the truth and did not want anyone to "rock the boat" so instead of allowing you to keep praticing they banished you, silenced you , the cowards that they are.

  4. His brother was a former prosecuting attorney for Crawford County, disiplined for stealing law books after his term, and embezzeling funds from family and clients. Highly functional family great morals and values...

  5. Wondering if the father was a Lodge member?

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