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Bankrupt Apartment Complex to be Sold at Auction

FEB 27, 2013 9:59am ET

The Manor Six Forks apartment complex in Raleigh, owned by WM Six Forks LLC, is being sold at auction after liquidation terms were agreed to with the U.S. Bankruptcy Court.

The five-story, 298-unit apartment complex is 90% occupied and the complex contains approximately 14,000 square feet of unfinished retail space. Amenities of the property include a theater room, billiards area, residential library lounge and business center, fitness center, and a swimming pool and courtyard.

Construction of the complex was completed in March 2010.

WM Six Forks filed for Chapter 11 bankruptcy in August 2012 in order to try to stop a pending foreclosure on the asset from Lenox Mortgage LLC, holder of the construction lender’s first priority lien for the property. According to bankruptcy filings, WM Six Forks still owed creditors $49.8 million for the complex.

The property is valued at $32.5 million, according to Wake County tax rolls.

As part of the liquidation agreement, all real and personal property (other than cash) comprising the complex is under contract for sale, “as is/where is” and subject to higher and better offers to Lenox Mortgage LLC.

The purchase price in the Lenox contract is a “stalking horse” credit bid of $37.1 million. To be considered a qualified bid to acquire this complex, a competing bid must be a cash bid of no less than $37.2 million and must conform to other requirements set forth in court approved bidding procedures.

If one or more qualified bids are received, these purchasers, including Lenox, will participate in an auction to determine the highest and best bid for the complex.

At the auction, Lenox may credit bid up to the amount of its allowed secured claim, which is not less than $39 million.

The bid deadline for prospective buyers of the property is March 18.