A federal judge has denied Baton Rouge developer J.T. “Tommy” Spinosa’s motion that sought to block a bank’s foreclosure sale of his mixed-use Perkins Rowe project.
U.S. District Judge James J. Brady ruled late Thursday that Spinosa’s failure to post a bond of $242.3 million violated federal rules for delaying the judge’s award of $201.9 million to KeyBank National Association, of Cleveland, Ohio.
Brady granted that award Sept. 4 after more than three years of litigation over the development near the intersection of Bluebonnet Boulevard and Perkins Road. When KeyBank filed the lawsuit in July 2009, the lender alleged it had not received any payment on project construction loans since October 2008.
Spinosa, who personally guaranteed repayment of the loans granted to three of his Perkins Rowe companies, argued that KeyBank improperly interfered with some of his condominium sales and cost him more than $11 million.
But Brady stripped Spinosa of all his counterclaims and defenses after the developer and his firms refused to turn over documents requested by KeyBank.
Last week, Spinosa’s attorneys asked Brady to delay the judge’s authorization for KeyBank to sell Perkins Rowe. Spinosa needs time to pursue his request that the 5th U.S. District Court of Appeals
strip the case from Brady’s control and transfer it to state district court, his attorneys argued.
On Wednesday, however, KeyBank’s attorneys argued that Spinosa could not attempt to stay execution of Brady’s judgment without posting the $242.3 million bond, which would be 120 percent of the judge’s award.
Federal rules require that bond as a protection for
creditors, according to KeyBank.
Without that bond, KeyBank attorneys argued, there is “nothing to protect KeyBank’s right to collect the judgment against Mr. Spinosa, who is liable for the full amount.”
“Having carefully reviewed this matter, the court finds that KeyBank is correct on all counts,” Brady wrote Thursday.
Spinosa’s motion to strip the case from Brady and move it to state court remains pending before the 5th Circuit in New Orleans.
Spinosa lost control of Perkins Rowe in late 2009, when Brady appointed Jones Lang LaSalle Americas manager of the unfinished development. The Chicago firm has managed Perkins Rowe to a profit each year since that appointment.
Perkins Rowe has 87 condominiums, 226 apartments, more than 60 shops and restaurants, a book store, grocery store, fitness center, movie complex and pharmacy.