Trooien Settles with Lender Over Loans
Bankrupt real estate developer Gerald Trooien and his lender, General Electric Capital Corporation (GE Capital), have reached an agreement to settle a dispute over $18 million in loans, thus allowing Trooien's bankruptcy case to move forward.
According to bankruptcy documents, Trooien will pay GE Capital $87,500 in exchange for GE Capital dismissing claims against him and his business entities. Those claims resulted in liens being placed against 29 of Trooien's properties.
Trooien-who owns St. Paul real estate development company JLT Group, Inc.-filed for Chapter 11 bankruptcy protection in October, claiming assets of between $1 million and $10 million and liabilities totaling between $100 million and $500 million. He owes money to between 50 and 99 creditors, including GE Capital.
Under the settlement agreement, GE Capital will reduce the amount that Trooien owes the company to $10 million from the original $18 million, and it will seek that amount in the bankruptcy proceedings.
A hearing has been scheduled for later this month for the court to approve the settlement agreement.
According to court documents, the settlement allows Trooien to proceed with his bankruptcy case and will save him money for attorney fees and court costs.
“[The settlement] permits [Trooien] to focus attention on the filing and negotiations . . . of a plan of reorganization or liquidation that will achieve for all creditors the ability to obtain value for the remaining going-concern value of the commercial real estate projects,” the documents said.
In addition to the claims that GE Capital made prior to Trooien's bankruptcy filing, it also filed documents with the court requesting that Trooien's bankruptcy case be dismissed or converted to Chapter 7 liquidation. A hearing to determine the fate of the bankruptcy case is schedule for March 29.
Last month, the Federal Bureau of Investigation (FBI) and the Internal Revenue Service searched Trooien's St. Paul offices in an attempt to find evidence relating to an alleged fraud scheme.
Steve Warfield, a special agent and spokesman with the FBI, told Twin Cities Business that authorities were looking for evidence “pertaining to an alleged fraud scheme.” Charges have not been filed in conjunction with the probe.