Developer Trooien’s Bankruptcy Exit Plan Approved
Nine months after filing for bankruptcy, local real estate developer Jerry Trooien's reorganization plan has reportedly been approved, setting him up to exit bankruptcy protection.
U.S. Bankruptcy Judge Nancy Dreher on Thursday approved Trooien's reorganization plan, according to a report from the Star Tribune.
Under the plan, Trooien will keep a number of potentially valuable core holdings that include several key properties around the Twin Cities, as well as his main property management company, JLT Group, Inc., according to the Star Tribune. Creditors will reportedly get about $7.7 million-a fraction of the $90 million that Trooien owes them.
Creditors indicated that they think they will be better off letting Trooien try to strengthen his assets rather than forcing him into liquidation, the Minneapolis newspaper reported.
The reorganization plan also indicates that creditors will split ownership of core Twin Cities properties and will receive half the equity in most of Trooien's properties in five years, the Star Tribune reported.
Although Trooien's bankruptcy case is moving forward smoothly, a $42 million mortgage scheme involving the Cloud 9 Sky Flats-one of Trooien's former projects-has surfaced. Last month, one of the real estate associates that was involved in the scheme, Sheri Lynn Delich, pleaded guilty and indicated that Trooien was involved.
At the time of the accusation, Trooien e-mailed the following statement to Twin Cities Business: “I do not know this woman and have never in any manner communicated with her, let alone having given her 'instructions' on any real estate transaction. I have hired attorney Earl Gray and he will be handling this matter. Any further comment will come from him.”
On Monday, another individual-Lindsey Rae Loyear-was charged with one count of conspiracy to commit mortgage fraud for her alleged involvement in the Cloud 9 Sky Flats scheme.
To read more in the Star Tribune about Trooien's bankruptcy plan and his background, click here.