An Ohio lender asked Wednesday that a federal judge in Baton Rouge deny developer J.T. “Tommy” Spinosa’s motion to block the bank’s authorized foreclosure sale of the Perkins Rowe mixed-use project.
Cleveland-based KeyBank National Association, through Atlanta attorney Janine Cone Metcalf and Baton Rouge attorney Michael D. Hunt, told U.S. District Judge James J. Brady that Spinosa failed to post a required bond of $242.3 million.
Absent that bond, KeyBank argued, federal rules in Baton Rouge bar Spinosa from seeking a stay of Brady’s ruling that Spinosa and three of his Perkins Rowe firms owe $201.9 million in principal and interest on construction loans.
“Until the property is sold at the foreclosure sale, the ownership of the property remains uncertain, and the completion of the project will remain on hold,” KeyBank argued. “That is not in the best interest of KeyBank or the residents and tenants of Perkins Rowe.”
The foreclosure sale should proceed unless Spinosa posts a bond that is 120 percent of the $201.9 million judgment, Metcalf and Hunt said on behalf of KeyBank.
On Sept. 4, Brady authorized KeyBank, as representative of a consortium of nine lenders, to initiate the sale of Perkins Rowe.
The development has 87 condominiums, 226 apartments, more than 60 shops and restaurants, a book store, grocery store, fitness center, movie complex and pharmacy.
Spinosa’s development firms ceased paying on their loan in October 2008, KeyBank said in the suit it filed in July 2009.
On Sept. 27, Spinosa asked the 5th U.S. Circuit Court of Appeals to take the case away from Brady and order it tried in a state district court.
On the same day, Spinosa asked Brady to stay execution of KeyBank’s authorized foreclosure sale.
KeyBank argued Wednesday that Spinosa should not have filed anything with the 5th Circuit until after Brady rules on Spinosa’s motion for a stay of the jurist’s judgment.
The bank’s attorneys also argued that Brady correctly ruled on more than one occasion that the dispute was correctly filed in federal court.
Metcalf and Hunt told Brady: “KeyBank hoped to avoid having to spend more time, money and judicial resources on this litigation. Unfortunately, (settlement) efforts to avoid foreclosure have failed, and KeyBank is entitled to execute on the judgment.”