Tuesday, April 5, 2011 | 10:21 a.m.
Land bankruptcy
The Las Vegas-area real estate market was hit with a sizable bankruptcy Monday -- this one involving a stalled residential project in Henderson.
R & S St. Rose LLC, owner of 38 undeveloped acres on the north side of St. Rose Parkway, listed assets of $16.8 million and liabilities of $48.3 million in its Chapter 11 reorganization petition.
The land now valued at $16.8 million is between Jeffreys and Spencer streets, west of Eastern Avenue.
R & S St. Rose LLC owes $12 million to a sister company, R & S St. Rose Lenders LLC, which also filed for bankruptcy on Monday.
R & S St. Rose LLC owes another $36 million to the failed Colonial Bank, though it's unclear if that claim is now owned by the Federal Deposit Insurance Corp. or to Branch Banking & Trust Corp., which took over some of the Colonial Bank loans.
Records show the R & S St. Rose companies are controlled by investors Saiid Forouzan Rad and Phillip Nourafchan.
In 2005, R & S St. Rose purchased the property at issue for $45 million with plans to re-sell it within one year to Centex Homes for $54 million, court records show. In 2006, Centex chose not to exercise its option to buy the property and forfeited its deposit.
The funding for the purchase came from a $12 million loan from R & S St. Rose Lenders, a $29 million loan from Colonial Bank and $8.1 million in deposits from Centex, records show.
R & S St. Rose Lenders, in its filing, listed the $12 million note from R & S St. Rose as an asset against liabilities of $19.7 million.
In 2008, Las Vegas attorneys Robert Murdock and Eckley Keach sued both R & S St. Rose companies, Rad, Nourafchan and others charging they had loaned a combined $600,000 to the project after they and other investors were solicited to invest in it -- but that the R & S St. Rose entities had falsely represented exactly which entity owned the property and provided other incorrect information.
The attorneys also charged in their suit that the R & S entities had diluted their position in the project by encumbering it with additional debt without their authorization -- and failed to repay the attorney's notes when they came due in 2006.
Those allegations were denied, but Keach eventually won a $1 million judgment in the lawsuit and Murdock was awarded $166,000. R & S St. Rose is appealing.
Another lawsuit was filed in 2009 by investor George Nyman, who complained that in 2005 he invested $300,000 with R & S St. Rose Lenders in the form of a promissory note secured by a deed of trust -- but that the defendants later failed to make required interest payments and failed to repay his principal.
That lawsuit complained R & S St. Rose Lenders LLC "improperly and against its self interest and the interest of its lenders failed to foreclose the deed of trust securing its interest in the property."
In October, Bankruptcy Judge Mike Nakagawa in Las Vegas dismissed an involuntary Chapter 7 bankruptcy liquidation petition filed against R & S St. Rose LLC by Branch Banking & Trust Corp., noting uncertainties over whether the Colonial Bank loan had been assumed by Branch Banking or the FDIC.
Both of the R & S St. Rose entities filed for Chapter 11 bankruptcy reorganization voluntarily on Monday.
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