Kelley Drye Negotiates Full Investment Recovery for Crown Farm Retail in Bankruptcy Proceedings for Montgomery County, Maryland Development
Kelley Drye represented Crown Farm Retail, an affiliate of Bethesda, Maryland-based Finmarc Management and Spectrum Partners, in negotiating full recovery of Crown Farm Retail’s investment in Crown Farm, a 180 acre undeveloped tract in Gaithersburg, Maryland. The favorable settlement was approved by the Bankruptcy Court of Delaware in bankruptcy reorganization proceedings in late December 2009.
In 2005, KB Homes Maryland LLC and Centex Homes Crown LLC purchased Crown Farm, which was approved for a mixed use development with more than 2,000 residential units. Crown Farm Retail held the development rights to 320,000 square feet of retail space on the property.
Due to the economic slowdown and weak housing market, site development stalled and the property owners declared bankruptcy in May 2009. In bankruptcy proceedings, Kelley Drye real estate, bankruptcy and litigation professionals acted to protect Crown Farm Retail’s interests against the competing claims of KB Homes Maryland LLC and Centex Homes Crown LLC, the homebuilders’ parent entities, and a consortium of national banks.
While Crown Farm Retail recouped its investment, the new owners of Crown Farm purchased the property for roughly half of the original price of $140 million. Marc Solomon, a principal of Crown Farm Retail, said that Crown Farm Retail’s full recovery would not have been possible without the “creative, determined and committed” attorneys at Kelley Drye.
The Kelley Drye team was led by attorneys Joseph B. Hoffman, James S. Carr and Ira T. Kasdan.