Bostic Construction case moving to Greensboro

The bankruptcy case for Bostic Construction has been approved to move to Greensboro, even as the limited-liability corporation for one of the apartment developer's projects has been forced to seek its own protection from creditors.

A bankruptcy judge in the middle district of Tennessee has signed an order to transfer the company's Chapter 7 proceedings to the middle district of North Carolina, said Robert Waldschmidt, an attorney in Nashville, Tenn., who was handling matters there for Bostic Construction.

Waldschmidt said a trustee is yet to be appointed to oversee matters in the new venue. Attorneys for the cash-strapped developer had wanted to move the case to North Carolina after a group of creditors filed the involuntary petition in January, arguing that most of the company's assets and its records were in Greensboro.

Separately, another group of creditors has filed a petition in the northern district of Georgia to force Bostic Development at Philip Blvd. LLC into Chapter 7 bankruptcy. The trio -- led by Roswell, Ga.,-based Earth Development Inc. -- claims that the limited-liability corporation owes it more than $2.2 million.

Earth Development CEO Edward Morgan was unavailable for comment, and Frank DeBorde, an Atlanta-based attorney hired by the creditors' group, declined to comment.

Christy Myatt, an attorney at Nexsen Pruet Adams Kleemeier in Greensboro who represents Bostic Construction founders Jeff and Joe Bostic, said the LLC in question was formed to build 240 rental town homes and apartments in Lawrenceville, Ga. She said construction had barely begun last fall when financial problems arose at Bostic Construction.

Jeff Bostic is a partner in Bostic Development at Philip Blvd. LLC, while Joe Bostic, who left Bostic Construction in 2003, is not listed as a partner in filings with the N.C. Secretary of State.

Last October, Bostic Construction President and CEO Mel Morris resigned after the company faced a cash crunch due in part to cost overruns and a series of behind-schedule projects. Bostic Construction at one time was the nation's second-largest apartment developer with more than $200 million in annual revenues.

Subcontractors began filing liens and lawsuits soon after Morris' departure in hopes of collecting on unpaid bills, while banks have since foreclosed on several of the developer's apartment projects across the Southeast.

But at least one student-housing project appears to be close to moving out of foreclosure.

David Adelman, president and CEO of Campus Apartments Inc. in Philadelphia, said his company has the highest bid -- at $9.45 million -- to buy the incomplete Campus Pointe project near N.C. Central University in Durham. He said the project would be his company's first in North Carolina.

That sum would be less than the $13.4 million KeyBank loaned Bostic Development at NCCU LLC, according to documents filed with the N.C. Secretary of State. Public records list Jeff and Joe Bostic, and former Bostic Construction executives Wink Hamill and Mike Freeman, among the venture's partners.

Adelman said the 204-unit Durham project is about 75 percent complete, adding that his company will invest up to $6 million more to finish the project, with plans of completed construction by the time classes resume this fall.

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