Michael Jordan May Lose Money on Training Gym Investment
08 Aug, 2012
(Crain’s) — A judge has dismissed a bankruptcy petition filed by Timothy Grover’s Attack Properties LLC, the West Side gym whose creditors include Michael Jordan.
Mr. Jordan, a key client in Mr. Grover’s career, helped the celebrity trainer build an impressive roster of clients that included Kobe Bryant and Alex Rodriguez.
The former Chicago Bull’s role in financing the 56,000-square-foot gym at 2641 W. Harrison St. wasn’t disclosed until Attack filed for protection from creditors April 13 in a last-minute bid to stave off a foreclosure sale of the property.
U.S. Bankruptcy Court Judge A. Benjamin Goldgar dismissed Attack’s bankruptcy case last month, setting the stage for the foreclosure sale to move forward.
Judge Goldgar dismissed the case in part because, he wrote, there was no reasonable chance the venture could successfully emerge from bankruptcy protection.
Attack has “no plausible route out of this predicament,” he ruled.
The ruling, which Attack has appealed in U.S. District Court, increases the likelihood that Mr. Jordan won’t recover the $1.5 million he is owed for “reimbursement for loan payoff,” according to a list of debts filed by Attack Properties.
Lawyers for Attack and Messrs. Grover and Jordan did not return messages requesting comment. Mr. Grover also didn’t return a call.
The gym’s legal troubles began nearly two years ago, when Old Second National Bank, the venture’s primary lender, filed a foreclosure suit in Cook County Circuit Court seeking to collect on a $9.95 million loan used to finance the project, which was completed in 2007, records show. The bankruptcy petition temporarily halted the foreclosure proceedings.
The foreclosure is now being pursued by an affiliate of King of Prussia, Pa.-based investment firm Ringgold Capital Management LLC, which last month bought the loan from Aurora-based Old Second — presumably at a discount.
But the property, about 1.5 miles west of the United Center, is now worth just $4 million, a fraction of the outstanding debt, according to a bankruptcy court filing by Attack.
Such a unique asset can be difficult to value, says Daniel Hyman, president of Chicago-based real estate firm Millennium Properties R/E Inc.
“It’s a rarity to have such a high, open space, so that makes it interesting,” he said. “Sometimes it’s considered a white elephant; on the other hand, the right buyers will pay for that.”
Mr. Grover is the sole owner of Attack and Attack Athletics Inc., the training business that he operates there.
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