The developer of a failed student apartment project across Hillsborough Street from N.C. State University has filed for bankruptcy protection in order to repay debts.
Hillsborough Lofts LLC filed a Chapter 11 petition on Monday saying it will have enough money to distribute to unsecured creditors. There are up to 99 creditors. The company reports having assets and debts ranging from $1 million to $10 million.
The filing puts on hold for now the Bank of North Carolina’s foreclosure auction over a defaulted loan, which was held last week. The bank reports an unsecured claim of $4.7 million.
The second-highest debtor is Wright Construction, which has filed a claim for $1.6 million. Wright is a contractor involved in litigation with the developer over the project.
In August, a panel of arbitrators ruled that neither Wright nor its subcontractors were to blame for delays on the project and that the developer wasn’t justified in canceling the contract.
Meanwhile, the concrete shell of the project, with a giant crane dangling overhead, has been an unfinished eyesore on Hillsborough Street for more than two years.
The plan was to build a 75-foot-tall, seven-story building with ground-level retail and apartments above. The site is next to Two Guys Pizza and a mini-Target store that is expected to open in November.
The bankruptcy filing leaves the abandoned project in limbo.
Alkesh Shah and Cary Joshi, the managers of Hillsborough Lofts, are represented by the Stubbs & Perdue law firm in Raleigh. Neither their attorney nor the bank’s attorney could be reached for comment Wednesday.
A hearing in federal bankruptcy court has been scheduled for November.