The developer behind the $2 billion Ritz-Carlton Paradise Valley and The Palmeraie luxury residential development has filed for Chapter 11 bankruptcy protection days ahead of a scheduled foreclosure sale.
Multiple entities connected to Five Star Development filed for the bankruptcy protection Nov. 4 in the Southern District of Texas.
The company reported estimated assets between $500 million and $1 billion against estimated liabilities between $500 million and $1 billion, according to bankruptcy documents.
What move means for Palmeraie, Ritz-Carlton Paradise Valley
The move offers Five Star a reprieve in its high-stakes litigation with an affiliate of Madison Realty Capital, the lender for the 122-acre Paradise Valley megaproject.
Madison had been pursuing a November foreclosure sale for the stalled development, alleging that Five Star has defaulted on a $585 million construction loan tied to the project.
Five Star filed a lawsuit against Madison in May, alleging that the lender has undermined it in an effort to take control of the property. A flurry of claims have gone back and forth in the intervening months.
This story is posted in partnership with Phoenix Business Journal. Click to read the full story.
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