Hyman Avenue mall’s Overland Sheepskin Co. is among the retail tenants of Ajax Holdings that could see a change in ownership if Mark Hunt buys the company’s assets.
The Souki family has landed a buyer for its commercial property in downtown Aspen, but developer Mark Hunt’s pending purchase is getting pushback from a lending group that wants assurances it will get a cut from the sale, according to comments made during a bankruptcy court hearing in Houston last week.
Hunt’s name did not come up directly during the June 27 hearing, but local commercial tenants of the Souki family have received notices that a change of ownership is pending and Hunt’s Chicago-based M Development will become their new landlord, people knowledgeable of the situation said.
The sale is scheduled to close the last week of July but not if a group of secured lenders has a say in it, according to remarks made at last week’s hearing held in U.S. Bankruptcy Court for the Southern District of Texas.
The lending group is trying to collect on what it says is $92.5 million against family patriarch Charif Souki and entities he controls. Unless sale proceeds from Souki-Hunt deal are protected in escrow, the lending group appears poised to take action, possibly legal, to block the deal.
“We were willing to consider a sale, but we don’t know what’s going to happen to those proceeds yet,” lawyer Laura Metzger said in bankruptcy court. “A simple solution: Agree there will be an escrow and nothing will happen to them until we figure that out. And we can even talk about an efficient process to figure it out. It might involve a court. It might involve something else. It could be an alternative resolution, but nothing happens until we figure that out.”
Hunt currently owns or co-owns nearly 185,000 square feet of commercial space in Aspen 16-block downtown core, which includes 1.2 million square feet of total retail and restaurant space, according to Aspen Daily News calculations. Hunt did not acknowledge messages left with him Tuesday regarding the situation.
Last week’s bankruptcy hearing, meanwhile, was over an emergency motion initiated June 14 by the lending group. The group’s motion sought a final judgment against entities controlled by Souki over personal loans he initially defaulted on in May 2020.
The lenders pursued the judgment, in a revised amount they calculated to be $92,748,038, after after a confidential mediation discussion among the parties held in Houston on June 4 failed to produce a resolution over how Souki would satisfy the debt.
“But two weeks after that mediation failed, two weeks and two days, we learned the Soukis entered a purchase agreement to sell some of (their) underlying most valuable assets, with the full knowledge that we would only support it with an escrow in place, if at all,” Metzger said at the hearing. “We obviously would need to see the terms. We have a general understanding of some of those terms, but notwithstanding what we would characterize as pretty deceptive move by the Soukis, we’re still willing to try and find a resolution and we’re still willing to try and support this sale.”
The amount due to the lending group has fluctuated, and a written order from Lopez on April 1 determined Charif Souki owed at least $100 million on the loans, which he received by pleading as collateral Aspen Valley Ranch, personal possessions and downtown commercial property.
Funds from a bankruptcy sale of $30.5 million for the 800-acre ranch and luxury homes, won in October by Chivron LLC, an affiliate of the lending group, were put into escrow. Those funds have since been distributed to the lending group and applied against the Souki debt. The lending group's most recent calculations pegged the amount they are owed by Souki at nearly $93 million.
Aspen lawyer Maria Ticsay, speaking for those commercial subsidiaries at last week’s hearing, said the deal under contract with Hunt for the downtown properties was not done secretly and the lending group was kept apprised of it.
“The notion that we are impairing the value … and these transactions were done behind the backs of the lenders is absolutely false,” said Ticsay, noting that those subsidiaries are not party to the bankruptcy case.
“They (the lending group) are very familiar with this buyer,” she said. “It’s a buyer who was interested in the ranch; it’s a commercial portfolio that’s right within his wheelhouse.”
Ticsay told the court that the deal is in motion and escrow is not an option at this point. Still, the proceeds from the sale will be a point of contention, she said.
“There was nothing done in secret,” she said. “We immediately included them, because we know we’re going to have a fight about proceeds.”
Metzger countered that “if Ms. Ticsay is so concerned about getting this sale done … the easy thing to do would be to put the proceeds (in escrow).”
The remaining collateral that would be sold includes assets of the Souki Family 2016 Trust and Strudel Holdings LLC that Charif Souki pledged against personal loans he received of $50 million in April 2017 and $70 million and March 2018, according to court records.
Complicating the already-complex matter is that Souki pledged 50% of Ajax Holdings as collateral; the Souki family trust and Strudel Holdings are equal owners of Ajax Holdings. Strudel also was a 50% owner of Aspen Valley Ranch with AVR AH, both Souki entities. As well, those entities are made up of LLCs that own pieces of the commercial property portfolio under Souki’s ownership.
“We can’t let the sale occur and hope that the money will be there when it when it’s time to distribute the correct amount to the shareholders of Ajax Holdings,” Metzger said. “We have a pledge on 100% of the shares of Ajax Holdings. We are entitled to 100% of the equity value of Ajax Holdings. We have control rights in our pledge agreements over Ajax Holdings.”
The properties that Hunt could acquire include four locations in the Hyman Avenue pedestrian mall, the 500 block of East Hyman Avenue and 4,072 square feet of retail space at the Aspen Square Building at 617 E. Cooper Ave.
The actual value of those properties, which residential and commercial, amount to $67 million, according to the Pitkin County Assessor’s Office’s website records.
The bankruptcy case of AVR AH and Strudel Holdings LLC, which own Ajax Holdings and had owned the ranch, was filed in July and remains active after being originally declared in July 2023. Lopez said he will not make legal determinations in the bankruptcy case regarding the sale of the Souki commercial assets.