Another Wichita apartment complex sold to a group of investors by Oklahoma City apartment investor Lew McGinnis is in foreclosure — but the group’s attorney says they expect to settle the lawsuit and operate the complex.
Fannie Mae, the agency that buys and resells mortgages, filed suit last week to foreclose on the Siena Court Apartments, 1940 S. Woodlawn. The complex was formerly named Ashbury Court Apartments.
Fannie Mae claims the owner, 1 Ashbury Court Partners of Bellevue, Wash., owes $2.8æmillion.
The partners who make up 1 Ashbury Court Partners bought the complex from McGinnis in 2008.
Olathe attorney Don Huelson, who is representing the owners, said Thursday that he expects the partners in the investment group to settle the case with Fannie Mae next week and keep ownership of the complex. It will require some significant investment, he said.
Sherwin-Williams, the paint company, is also named as a defendant because it has a claim on the property.
Huelson said his investors went into foreclosure because they could never achieve the occupancy rates and cash flow numbers that McGinnis said he had — and encountered higher repair bills.
“It’s something that doesn’t make sense,” he said. “But we’re going to get to the bottom of this.”
Huelson said he expects to file suit seeking damages against McGinnis and his management company, Macco Properties, which is based in Oklahoma City.
The case is part of the ballooning series of legal actions surrounding McGinnis.
He is the target of investors who bought the 360-unit Linwood Apartments, 2008 S. Hydraulic, in 2008. The lawsuit filed by the Brooklyn N.Y.-based investors, the Linwood Group, contends that McGinnis committed fraud by understating expenses and inflating revenue, profits and occupancy, making it impossible to generate the anticipated return on the investment.
McGinnis has tried to sell three other apartment complexes in the last year, but they are now in foreclosure.
FAA Credit Union, which has a branch in Oklahoma City, is foreclosing on River Park Plaza Apartments, 400 W. Central, and Villa Del Mar Apartments, 550 N. Nims. It is seeking more than $15æmillion.
Macco Properties filed for bankruptcy in Oklahoma City last week listing $50æmillion in assets, including the apartment complexes in foreclosure.
On Thursday, the two McGinnis companies that owned Riverpark Plaza and Villa Del Mar apartments declared bankruptcy in Oklahoma City.