MOORE — Chicago-based Inland Real Estate Group is ready to buy the Shops of Moore in a $38.75-million deal that will solidify Inland's Oklahoma City-area retail presence and pluck developer Burk Collins' big shopping center out of bankruptcy.
The shopping center southeast of 19th Street and Interstate 35, by all accounts, has been largely successful since its development in 2004-2005 by Collins and business partner William Lippman under the name Moore Sorrento LLC.
J.C. Penney Co., Ross, Office Depot, PetSmart, Famous Footwear and most of the 15 other stores beat the national recession and muted economic activity here.
Its future rests with a bankruptcy judge in Fort Worth, Texas — and, technically, a state district judge in Dallas and a state district judge in Norman.
For the past year, the property has been caught up in three court proceedings: the bankruptcy in Fort Worth, a lawsuit Collins filed against lender Wells Fargo in Dallas, and a foreclosure in Norman. It could all be wrapped up in a few days — if the bankruptcy judge approves a plan to sell the property to Inland and settle the lawsuit and foreclosure.
The recession, which caused retrenching by national retailers, didn't help, but more than diminished operations beset the Shops at Moore. The developer refinanced the project and borrowed to fund improvements in November 2007, just before the Great Recession hit.
Court records show that the structure of the refinance was just the kind of highly leveraged deal that the recession and credit freeze unraveled everywhere: a large first note, $35,244,000, coupled with a smaller mezzanine loan, $6.5 million, with the developer having relatively little principal invested.
The loans, made by Wachovia Financial Services, acquired by Wells Fargo in 2008, originally were due Nov. 9, 2009, extended to June 30, 2011. Collins sued Wells Fargo that July 15. Wells Fargo started foreclosure proceedings in Norman on July 18.
Collins' Moore Sorrento LLC, owner of the Shops at Moore, filed for Chapter 11 bankruptcy protection on Aug. 17, which suspended the foreclosure, and submitted a plan for reorganization on Oct. 3. By last spring, Inland was in negotiations with Collins to buy the 385,586-square-foot shopping center.
Buyer lined up
Last week, Collins asked the bankruptcy judge to approve Inland's purchase. It was the second request. Collins asked the judge to approve a sale to Inland last spring, court records show, but the deal fell apart when Inland made last-minute demands, forcing renegotiation.
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