CBJ notes that Regions Bank asks some impolite questions about EpiCentre in a filing in the ongoing bankruptcy of the Uptown play-place. The details:
“The EpiCentre is riddled with contradictions,” Regions states in its motion seeking a court examination of the complex’s financial records. “Despite outstanding construction loans of approximately $90 million and additional millions of dollars of labor and materials provided by unpaid contractors and subcontractors, the project remains unfinished and the debtors themselves now assert its value is less than $42 million.”
Then, as we pointed out last week, there is the no visible means of support aspect of EpiCentre’s operation. It just does not seem to throw off all that much revenue:
“Despite restaurants and bars that appear to be thriving and popular, the project itself generates relatively insignificant net cash flow,” the bank’s motion states.
Then the money quote, which cuts straight to the matter at hand:
“And then there is the self-dealing,” the motion contends. “Despite loan covenants and commercial standards which mandate arm’s-length transactions, the debtors, under the control of Afshin Ghazi have used a web of affiliated entities to effect a series of transactions which unquestionably have depleted these estates.” … “The debtors’ transactions with affiliated entities must be disclosed and justified, or, as appropriate, avoided,” Regions’ motion states. “And creditors deserve a forthright answer to the most basic of inquiries: where did all of the money go?”
Here’s a good way for the bankruptcy proceeding to start — go find any arm’s-length transaction associated with the project. Also, make city of Charlotte and Mecklenburg County staff spill everything they know in terms of interacting Afshin Ghazi and/or his representatives.
