The developer of the Centerpoint high rise condominium towers in downtown Tempe is seeking to convert its Chapter 11 reorganization case into a Chapter 7 liquidation.
Tempe Land Co. filed the motion in U.S. District Court in Phoenix this week, saying it would expedite the completion of the nearly finished project.
The two high-profile buildings have languished at about 90 percent completion since the bankruptcy of Tempe Land's chief financial backer, Mortgages Ltd., last year.
Tempe Land made its own bankruptcy filing in December, hoping that a reorganization would enable it to find about $45 million in financing from other sources to finish the job. But those efforts were unsuccessful, and the move to Chapter 7 of the U.S. Bankruptcy Code could allow the sale of the property to repay the lender and find new financing.
"The impact of the motion is that the bankruptcy will be put into the control of a trustee who will decide how to proceed," Tempe Land said in a statement. "Tempe Land Co. is confident that with this action, resolution of the property's ownership can occur quickly so that construction can be re-commenced and finished on the stalled ... project."
The company said "adverse markets, ongoing conflicts and continuing costs contributed to the decision" to move the case to Chapter 7.
The court-appointed trustee and Mortgages Ltd. had sought to move the case to Chapter 7, but Tempe Land had resisted until this week.
Mortgages Ltd. lent $133 million to Tempe Land to build the towers, money that was supplied to Mortgages Ltd. by private investors. When Mortgages Ltd. filed for bankruptcy protection following the suicide of its principal, Scott Coles, in the summer of 2008, that source of money dried up.
Since then the two sides have been at loggerheads with each accusing the other of misconduct.