Here is another bankruptcy filed by several subsidiaries of Transcontinental Realty Investors' sister company, American Realty Investors (ARL). The two companies are publicly traded but have the exact same management and engage in the same practices.
In this case, Far East Bank loaned $28.7 million to ARL and several subsidiaries. The subsidiaries quit making their payments and filed bankruptcy petitions on July 19,2010. Far East Bank had some smart lawyers and unlike other lenders who were stiffed by TCI and their subsidiaries, Far East went after only American Realty in Nevada state court. Well, what do you think American Realty tried to do? Remove it to, you guessed it, bankruptcy court where its subsidiaries filed their petitions.
Far East Bank fought the transfer and won. The bankruptcy judge ordered it back to state court. The state case is now tied up on legal issues and is on appeal to the state supreme court although it has not been adjudicated at the trial court level. Far East thus is still trying to collect its $28 million. Does any of this sound familiar?
Far East motion. Background of case is nice read.
Far East Bank exhibit
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