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The Lake District Faces Financial Turmoil: Chapter 11 Bankruptcy Filing Reveals Massive Debts

Download the entire Chapter 11 filing

In a shocking turn of events, The Lake District, a popular commercial development in Lakeland, Tennessee, filed for Chapter 11 bankruptcy on the day it was supposed to be auctioned off for foreclosure. The filing unveils the shaky financial state of the project, disclosing a list of creditors holding the 20 largest unsecured claims, totaling millions of dollars in unpaid debts.

Among the top creditors are A2H Engineers with a trade debt of $27,911, Activate IV with a tenant improvement allowance of $41,141, and Albright Investments, LLC with broker commissions amounting to $20,832. Carr Real Estate Brokerage is also owed $11,442 in broker commissions, while Chosen Lines Boutique has a tenant improvement allowance claim of $42,527.50.

The list of creditors continues with Economics Erosion Control, owed $89,799 in trade debt, and Ella & Leah Fitness, LLC, doing business as Stretch Lab Lakeland, with a tenant improvement allowance claim amounting to $37,575. Fossett Paving Company is due $114,583 in trade debt, and Gilad Development Corporation has a staggering loan claim of $2,674,510.40.

Gipson Mechanical Contractors claims $52,720.75 for rooftop HVAC and installation services, while Gloss Nail Bar, LLC has a tenant improvement allowance claim of $307,840. Other creditors include Grinder & Haizlip Construction with a trade debt of $63,155, Hollywood Feed, LLC with a tenant improvement allowance claim of $36,000, Kardoush, LLC with a tenant improvement allowance of $146,140, and Lakefront Wellness, LLC with a tenant improvement allowance claim of $38,920.

Pyramid Electric, Inc. has a trade debt claim of $105,356, TLN Group, LLC has a tenant improvement allowance claim of $25,000, and VC Restaurant, LLC has a tenant improvement allowance claim of $136,875.

Some of the claims are contingent, unliquidated, or disputed, such as those by Erik Gonzalez and Frida’s Express, Inc., both with counterclaims for breach of contract. Hollywood Feed, LLC’s tenant improvement allowance claim is also contingent, unliquidated, and disputed, subject to setoff.

The Lake District’s Chapter 11 bankruptcy filing reveals the debtor’s assets, including cash and cash equivalents, accounts receivable, investments, and real property. The debtor has $6,911.35 in cash and cash equivalents, with $3,000 in a Simmons Bank checking account and $3,911.35 in a First Horizon Bank checking account. The debtor also has accounts receivable totaling $206,869.98, with $101,110.54 being 90 days old or less and $105,759.44 being over 90 days old.

The debtor has a 99.75% ownership interest in The Willows at the Lake - Homes, LLC, valued at $0, and a 99.75% ownership interest in The Willows at the Lake - Townhomes, LLC, valued at $1. The debtor also owns a 2016 Range Rover Sport with a current value of $30,725.

The Lake District’s real property assets include a fee simple interest in the property at 3536 Canada Road, with an unknown net book value and a current value of $60,000,000. The debtor also has interests in intangibles and intellectual property, as well as other assets not yet reported on the form, such as a Tax Increment Financing Agreement with the Industrial Development Board of the City of Lakeland, with a current infrastructure cost reimbursement of $20,000,000.

The debtor has causes of action against third parties, including a breach of lease and guaranty claim against Frida’s Express Inc., Frida’s Inc., Lauriano Gonzalez, Jesse Gonzalez, and Erik Gonzalez, with an unknown amount requested. Additionally, there is a counterclaim for breach of contract against Hollywood Feed, LLC, also with an unknown amount requested.

This unexpected turn of events has left the future of The Lake District uncertain, as the popular commercial development now faces a daunting financial situation. With countless creditors and millions of dollars in unpaid debts, only time will tell how this development project will fare in the coming months.

As The Lake District grapples with its financial woes, the development is actively seeking financing and equity investment opportunities to mitigate the situation. The management anticipates submitting a reorganization plan to the court within the next 90 days, outlining its strategy to restructure the debt and repay creditors. This plan will be crucial in determining the future of the commercial development and restoring confidence among stakeholders.