321 North Developers, Owners Filing Chapter 7

Mapuche, LLC (“Mapuche”), U.S. Capital Holdings, LLC (“US Capital”), and U.S. Capital/Fashion Mall, LLC (“USCFM”, collectively the “Fashion Mall Entities”) the developers and owners of the Plantation Fashion Mall, announced today their intentions to file voluntary petitions under Chapter 7 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Florida, according to a release.
The purpose of the bankruptcy filings is to place the assets in the hands of professional fiduciaries in order to maximize value for all concerned.  In conjunction with the filing and the appointment of Chapter 7 trustees in the respective cases, the owners of the Fashion Mall Entities will present various expressions of interest in acquiring substantially all of its assets through a court supervised auction to its interest in the Plantation Fashion Mall. Mr. Chen formed US Capital Holdings, LLC to purchase the shuttered property in 2004. Since then, millions of dollars have been invested to revitalize and rehabilitate the property.
Notwithstanding these efforts, the business venture has been plagued for nearly a decade.  The Plantation Fashion Mall sustained massive damage from Hurricane Wilma.
On January 25, 2007, USCH and its subsidiaries announced plans to develop the project into a mixed-use lifestyle destination, named 321 North (for its address on University Drive).  The plan called for a significant portion of the mall structure to be demolished, and the retail portion to be reconfigured to street-front stores. The company received site plan approval in November 2008 and began renovations. However, the recession that took full effect in South Florida in late 2008 and in 2009 brought the project to a halt. Through 2010 and 2011, legal issues related to disputes with its insurance carrier dominated the business and on February 24, 2012, US Capital and its wholly owned subsidiary U.S. Capital/Fashion Mall, LLC, filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the Southern District of Florida.  On October 31, 2013 US Capital successful emerged from its chapter 11 bankruptcy.  Once the chapter 11 bankruptcy plan was approved, it was believed that the project would continue to move forward.   Since confirmation of the bankruptcy plan, revised plans were submitted to the City and the office tower has undergone significant renovations and upgrades aimed at providing a Class “A” office space.
Unfortunately, progress on the Fashion Mall project again faces obstacles as Mapuche, LLC, USCH’s parent company, became embroiled in a partnership dispute between Mr. Chen and his business partner, Tangshan Ganglu Iron & Steel Co., Ltd.  Tangshan Ganglu Iron & Steel Co., Ltd, which is led by a Chinese national Zhen Zeng Du, first sued in Federal Court and the case was dismissed.  Then, Tangshan Ganglu Iron & Steel Co., Ltd. sued in Broward Circuit Court for a judicial dissolution of the company.  Recently, Broward County Judge Tutor observed “This case could go on for month or years, and the decisions I make are subject to [appellate] review.”
Mr. Chen and his team have worked tirelessly and in good faith with business partners, creditor groups the City and people of Planation to develop a dynamic mixed use life-style destination in mid-Broward County.  It is the hope that the bankruptcy filing will put the asset back into productive use faster—and with less disruption to all the non-owners, that is the employees, subcontractors and our Plantation neighbors—than a state court liquidation.
The Fashion Mall Entities look forward to the appointment of professional fiduciaries who will advance their cases in the Federal bankruptcy system. Through these proceedings the Fashion Mall Entities believe the employees and the property will have the best chance to get back on track to providing a beautiful space for the Broward community.
More details will become available once the Fashion Mall Entities file their petitions and schedules.

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