The Herald Weekly
A federal bankruptcy judge has given Fifth Third Bank permission to complete its foreclosure on more than half of the Neighborhoods at Abersham development on Grey Road.
According to bankruptcy court records, R. Keith Johnson, the court-appointed attorney for the development company, agreed to Fifth Third’s request and as part of his findings, the judge in the case said the money owed Fifth Third “exceeds the value” of the property.
Fifth Third holds a $6 million mortgage on 150 acres of the development, which sits near Shearer Road on the Mecklenburg-Iredell county line. Community One Bank holds a $3 million mortgage on the remaining 93 acres, according to bankruptcy court files.
Jennifer Leahy, an attorney for Fifth Third Bank, declined to comment.
However, Fifth Third was well into its foreclosure action when the bankruptcy filing stopped it. According to Leahy’s earlier motion, the bank initiated a foreclosure sale Oct. 27, 2009, and at that sale Fifth Third was the only bidder, offering about $3 million.
But nine days later, Frank Jacobus Jr., who signed the $6 million loan on behalf of Neighborhoods at Abersham, filed for protection under the bankruptcy code, effectively stopping the foreclosure.
Reed Jackson, managing director of Ivester Jackson, the real estate firm marketing the only home built in the development, said he thinks Fifth Third will try to find another developer capable of buying all 150 acres and finishing that part of the subdivision.
The home Jackson’s firm is marketing is not part of the bankruptcy proceeding.
Breaking the 150 acres among a number of buyers will expose each buyer “to more risk” that the community won’t be finished as envisioned, Jackson said. And more risk will reduce the price the bank can get, he explained.
Any new developer will have to abide by the strict covenants written into the deed, requiring preservation of natural spaces, Jackson said. The new developer will have to work with Abersham if it emerges from bankruptcy or Community One if it forecloses on the remaining land; the Davidson Lands Conservancy, which helped craft the environmental restrictions; and the Town of Davidson, which had to approve the development plan, according to Roy Alexander, conservancy executive director.
The town had to approve the development plan because the land falls in its extraterritorial zoning jurisdiction.
CORRECTION: Because of an editing error, the original version of this article on DavidsonNews.net left out a section about the timing of the bankruptcy filing. It has been corrected above.