Epicentre Emerges From Bankruptcy Protection

Epicentre Emerges From Bankruptcy Protection

March 9, 2012

Nearly two years after its owners put the EpiCentre into Chapter 11 to avoid foreclosure, the uptown Charlotte entertainment complex has emerged from bankruptcy protection.

U.S. Bankruptcy Judge George Hodges approved a liquidation plan Thursday that transfers ownership of the EpiCentre to an investment group backed by Boston-based hedge fund Baupost Group.

The popular 302,000-square-foot complex at College and Trade streets is now owned by an investor group, Blue Air 2010, which bought the project’s troubled loan. The developers who conceived of the mixed-use project, Afshin Ghazi and George Cornelson III, are out of the EpiCentre and no longer have any connections or business with the project.

The popular uptown entertainment complex has been mired in court battles since the original lender, Regions Bank, started foreclosure proceedings in July 2010 after the loan came due.

Shortly after, the two limited liability companies that own the EpiCentre filed for bankruptcy protection, stalling the foreclosure. Regions later raised questions about how Ghazi and Cornelson spent the loan money and accused the men in court documents of self-dealing, which the men denied.

Blue Air, a group backed by Baupost Group, bought the note in November 2010. A year later, Blue Air sued the developers, accusing them of wrongfully diverting money from the troubled entertainment complex before filing for bankruptcy protection.

The project’s movie theater, Mez restaurant and Kazba nightclub, once owned by a company affiliated with Ghazi, will get new ownership and stay open, operating under “business as usual,” said the trustee who oversaw the project while it was in bankruptcy protection.

The only objection Thursday came from Epic Wings LLC, the owner of Wild Wing Café. It objected in part because of a dispute over whether it overpaid for common-area maintenance fees.

Blue Air’s attorney, Brad Pearce, told the judge his client planned to evict the restaurant. “We don’t intend to keep them as a tenant going forward,” he said. “They’re a bad tenant.”

Epic Wings’ attorney, Michael Shor, told the judge his client had been overcharged for years and that management failed to fix leaky windows.

“I assume a tenant that wants their leaky windows fixed is a bad tenant,” Shor said. He said the company wasn’t a bad tenant, but instead “a tenant that doesn’t want to see its investment thrown out the window.”

Disputes that had arisen with other tenants were resolved. The owners of Whisky River, BlackFinn, Howl at the Moon, Strike City, Suite and Vida Cantina had objected because they feared they could lose their leases. Their attorney told the court Thursday a deal had been made to keep his clients’ leases in place.

The EpiCentre sits on the site of the old convention center, which was abandoned for years. It is viewed by city officials as an important part of uptown’s redevelopment. That’s especially true this year, with September’s Democratic National Convention drawing tens of thousands to neighboring Time Warner Cable Arena.

www.epicentrenc.com

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