One of the Top 10 property taxpayers in Erath County has filed for bankruptcy in the U.S. Bankruptcy Court, Northern District of Texas, Dallas Division.
Stam Ltd., owner of the Bosque Crossing Apartments on Vanderbilt Street adjacent to the Tarleton State University campus, filed Chapter 11 bankruptcy on March 5, and according to Erath County Tax Assessor/Collector Jennifer Carey still owes close to $200,000 in taxes, interest and penalties for 2006.
“All we can do now is wait for this to be settled,” she said. “Chances are someone will come see us before we are officially notified.”
Legal documents in Carey’s office include the original bankruptcy filing along with an Objection to Debtor’s Motion to Use Cash Collateral by Frost National Bank.
On Sept. 3, 2004, the apartment owners issued a promissory note for $12.4 million to Frost National Bank. Stam defaulted, failing to make payments that came due Oct. 31, 2006, and on Nov. 13, 2006, Frost entered into a Forbearance, Reinstatement and Ratification Agreement with the debtor. The first payment was made but no other payments were made.
On Feb. 12, Frost accelerated the maturity of the note and posted the real property for foreclosure sale on March 6, one day after the bankruptcy had been filed. Documents indicate Frost believes Stam filed the bankruptcy to forestall the foreclosure.
“Frost objects to debtor’s use of its cash collateral because Frost does not believe debtor has the ability to generate adequate revenue to service the note and cannot protect Frost’s interest,” the Objection says. “Debtor’s budget shows after operating expenses a monthly net income of $29,292.69 that will fluctuate between the end of school in May and the beginning of the next school year in mid-August.”
The terms of the note require Stam to make payments on a monthly basis at the rate of $2,848.59 a day, or $85,457.70 for 30 days.
The document says that Frost understands the apartment has been 60-percent occupied during the current school year. Based on the budget, it would have to be 100-percent occupied to receive adequate income to satisfy the note.
On April 24, a motion was filed by Stam to name Asset Campus Housing to manage the apartments. According to information from the attorney for Stam, Norman A. Zable of Dallas, that motion was granted.
The deadline to file a proof of claim in the bankruptcy case is July 5. According to Zable’s office, the bankruptcy is still in the court but no other dates for hearing were available.
The city issued a building permit for the 173 unit, 344-bed apartment complex on June 22, 2004. A temporary certificate of occupancy was issued by the city of Stephenville on Sept. 26, 2005 and a permanent certificate was issued on Nov. 3, 2005.