Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 2, 1994 TAG: 9411020054
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Medium
Owners of Tanglewood Mall have sought protection in U.S. Bankruptcy Court after a Japanese lender refused to continue a loan on the property.
KTI of North Carolina Inc., which bought the Roanoke County shopping center last year, said Tuesday it has filed a petition for reorganization under Chapter 11 of federal bankruptcy laws. The action came after Nomura Asset Capital Corp. gave KTI 15 days' notice that it wanted the Tanglewood loan paid in full.
The petition, which lists liabilities of $34 million and assets of $42 million, was filed Monday in Raleigh, N.C.
The filing gives KTI 120 days before it has to give the court its plan for repayment and protects it from creditors. The Nomura loan is the only debt involved, officials said.
The filing is a legal maneuver and is not expected to affect the mall's retailers, nor block plans to purchase a second Roanoke Valley property, owner John Kane said Tuesday. KTI is a division of John M. Kane & Co.
His company bought Tanglewood from MRI Tanglewood Rental Investments Inc.
Kane also has a contract to purchase Towne Square Shopping Center near Roanoke Regional Airport. He said he expects to complete that transaction in December.
Negotiations with Nomura are continuing, he said, but he couldn't predict their outcome.
The Nomura loan was a "bridge loan" to provide temporary financing until a permanent mortgage could be negotiated.
It included a clause that gave the lender the right to ask for repayment at any time, which is not unusual in commercial loan contracts, said Roanoke attorney A. Carter Magee Jr., who represents Kane.
Tanglewood Mall merchants were told of the bankruptcy filing at a Tuesday meeting with John Lambert, a Roanoke public-relations consultant hired by the owner, and Judy Tullius, the mall's manager.
Lambert said tenants have been given information to help them explain the situation to shoppers. The reaction from tenants, he said, was that "it will be business as usual."
"We're looking for a good holiday season after coming off of a good month," said Thurman Johnson of J.C. Penney Co., one of the mall's anchor tenants.
About 88 percent of Tanglewood's 750,000 square feet is leased, and there are 17 temporary tenants signed up for the Christmas shopping season, Tullius said.
"I spoke to the tenants and they're very understanding of the situation," she said. ``They all feel strongly that we're heading into a good holiday season.''
By mid-month, the mall should get its first automated-teller machine, Tullius said. An ATM has been the No. 1 request from shoppers for years, she said.
Tanglewood Mall opened in the mid-1970s.
by CNB