Judge orders Pure Development to wind down operations

Pure Development co-owners Drew Sanders (left) and Chris Seger. (photo/Pure Development)

One of central Indiana’s largest commercial development firms has been ordered to wind down its operations, the result of a legal fight between the company’s owners that began last year.

Pure Development will be turned over to a court-appointed receiver in the coming weeks to makes sure the company’s active projects are completed or the company and its affiliates are sold to an outside party.

The judgment from Madison County Circuit Court, issued May 12, follows a nearly year-long legal entanglement between the company’s owners and principals Chris Seger and Drew Sanders.

Seger sued Sanders last July in a bid to win control of the company, claiming that the latter had forced the departure of key staff, put hundreds of millions of dollars in potential business at risk and prevented the company from making other personnel and strategy changes.

Sanders filed a counterclaim alleging a breach of fiduciary duty by Seger and abuse of process, claiming he was being pushed out of the business without having the opportunity for adequate financial relief.

The pair founded Pure in late 2012 after working as executives on real estate development together at Duke Realty Corp. in the 1990s and 2000s. The company has been involved in several major projects in central Indiana, including the Box Factory project on Massachusetts Avenue and the LEAP Research and Innovation District in Boone County.

The matter was moved from Marion County to Madison County commercial court and heard in a bench trial in February by Judge Mark Dudley.

Dudley, who oversaw both suits, dismissed Sanders’ claim, stating that he considered Seger’s moves to be within the bounds of his fiduciary duty to the company. He also generally ruled in favor of Seger’s request for dissolution of the company.

“The Court has granted all legal relief sought by Chris Seger and provided an orderly process to ensure all of Pure Development’s existing commitments are met,” attorney Robert MacGill with Indianapolis-based MacGill PC said in a written statement on Seger’s behalf. “The Court also ruled in favor of Mr. Seger and against Mr. Sanders on each of his counterclaims. We are thankful to the Court for fully resolving these important issues in less than 10 months.”

An attorney for Sanders did not return a call requesting comment Wednesday.

Initially, Seger sought to resolve the legal fight in the courts by asking for the appointment of a receiver, the same request the court ultimately granted.

However, he later offered a separate solution that would have seen another company, Canopy 5, inherit Pure Development’s portfolio and pipeline. That company would have consisted of Seger and three other Pure executives, two for whom he had previously sought to bring in as owners of the current company.

Seger had proposed to have Dudley oversee the new company for one year and provide quarterly financial reports. Transferring the projects to Canopy 5, the developer said, would prevent the triggering of default provisions in certain project contracts. But Dudley found that resolution to be an “inequitable” solution, rejecting it in favor of the receivership plan.

He separately rejected a remedy proposed by Sanders, which sought a $65 million buyout of his stake in the company. (Seger had unsuccessfully attempted to buy out Sanders’s stake in the past, according to court records.)

“The court’s determination to appoint a receiver provides a result which places each owner on equal footing in the real estate development industry while also providing for an orderly completion of the current projects, subsequent distributions and disposal of assets,” the judge’s order said.

On May 16, Sanders requested an emergency stay on the court’s order, citing concerns over Seger’s handling of company business during the bench trial. He also said he would like for updated financial details for the business and its affiliates, as well as a conference involving all parties.

The request for a stay notwithstanding, Sanders and Seger are each required to present two candidates for the role of receiver within 14 days of the judgement, from which the judge will select their appointment within an additional 30 days. The receiver will oversee day-to-day operations of Pure until the projects are done or the company is sold.

“The Court authorizes the receiver to act in the best interests of the shareholders and creditors, whether that be completing all current projects and later winding up the entities, or selling the entities with the opportunities that come with the current projects,” Dudley said in his judgement.

Sanders and Seger are each 50% stakeholders in Pure Holdings, the parent company of Pure Development, as well as equal partners in Pure Capital, a fundraising company affiliated with the development firm.

Pure currently has 28 projects in its development pipeline, including 13 in Indiana. It also has projects in Arkansas, California Massachusetts, Michigan, Nevada Ohio, Oregon, South Carolina and Texas, according to court filings.

Dudley said in his order that he understands that dissolving the company fully could take a while.

“The receiver’s role in this matter is especially unique, as [Pure has] many current projects, some of which will not see completion until years from now,” he said, noting the company’s structure of multiple legal entities “The receiver’s role here is not simply to immediately wind-up the three entities in an ordinary sense, disposing of assets and distributing the profits according to ownership.”

The company, which employs about 30 people at its Indianapolis and Denver offices, ranked as the 10th  largest commercial real estate development firm in central Indiana, according to IBJ research, with 3,664,000 square feet of developments completed or under construction in 2024.

Since its founding, Pure has completed more than 35 projects, including some in Midtown Carmel and Indianapolis. It’s also completed industrial development in Lafayette, Lebanon and Greenfield in Indiana and in Dayton, Ohio, and Ellisville, Mississippi, with clients including Amazon, BWI Group and GE Aviation.