American Asset, the developer behind Brier Creek, has settled a long-running dispute with Bank of America over 10 properties that the company managed in Charlotte and Raleigh.
Charlotte-based American Asset announced Wednesday that Bank of America has issued new 5-year loans for the properties, four of which are in Brier Creek.
“This was consensual in terms of the terms and the agreements,” said Paul Herndon, American Asset’s president. “What we walked away with is what we always wanted – to pay the bank back. We just needed more time to do it based on what happened with the economy.”
The properties contain nearly 700,000 square feet of space, including two office buildings in Brier Creek with about 250,000 square feet. Herndon said those two buildings are now mostly leased.
American Asset represented a group of borrowers that took out $130 million in short-term construction loans in 2008 to develop the properties.
Bank of America later started foreclosure proceedings on the properties, which led American Asset to sue Bank of America in 2011 for breach of loan agreement, saying the bank wrongly stopped funding loans and reneged on promises to do modifications, leaving it unable to pay brokers and hurting its reputation.
The borrowers then filed for Chapter 11 bankruptcy in March 2012 in an effort to rework the loans held by Bank of America.
Such Chapter 11 filings have become increasingly common in recent years as commercial property owners fight to hang onto their investments. The filings are often both a protective maneuver to avoid foreclosure and a way to put pressure on a lender to negotiate.
The bankruptcy court approved American Asset and Bank of America’s settlement on Tuesday.