Lawyers for the general contractor hired to build the failing Carolina Panthers headquarters in Rock Hill, South Carolina, say the company owned by team owner David Tepper wants to use inside sources to fund the bankruptcy, according to court testimony Wednesday.
GT Real Estate Holdings is the company created by Tepper to be the owner and developer of the York County site which is currently inactive. The project was hailed for including mixed-use retail and office space and was meant to be a boon for South Carolina and the region.
GT Real Estate declared bankruptcy on June 1, and the project was officially halted after construction halted in March amid a dispute between GT and the City of Rock Hill over financing.
GT Real Estate now wants to use its parent company, DT Sports Holdings Inc. LLC, to secure millions of dollars in bankruptcy loans, court records and testimony.
Attorneys for the general contractor, the city of Rock Hill and York County oppose it, say in court testimony and in documents that GT wants what they describe as an “insider” package without market financing to independent third parties.
During a hearing in federal bankruptcy court on Wednesday by Zoom of Delaware, Michael Roeschenthaler, lead counsel for general contractor Mascaro/Barton Malow (MBM), repeatedly called the attempted actions “a initiates”.
The proposal was opposed by MBM, York County and the Town of Rock Hill.
Case documents show MBM is a potential creditor seeking at least $26 million. York County says it is owed $21 million and the City of Rock Hill says it is owed $20 million.
In court Wednesday, Roeschenthaler questioned Jonathan Hickman, chief restructuring officer of GT Real Estate, for hours about the Tepper companies involved in the work stoppage, bankruptcy and financing plan.
Roeschenthaler claimed that GT failed to properly market the financing to third parties such as international banks and other lending institutions.
“There is a significant amount of insider trading regarding this debt,” Roeschenthaler said.
A document from the Secretary of State for GT Real Estate LLC in North Carolina introduced as evidence Wednesday by MBM attorneys showed that Tepper, a billionaire, was the only member of GT Real Estate.
Rock Hill, York County also opposes it
Rock Hill and York County attorneys who also attended the hearing said they objected to GT Real Estate using so-called insider financing, according to testimony Wednesday.
One of GT Real Estate’s attorneys, Chris Shore, said in court it was clear MBM, York County and the Town of Rock Hill would rather see GT liquidate the assets of the failed project than reorganize. in the event of bankruptcy.
The project has already spent $282 million, according to Hickman’s testimony. That amount includes $163 million from the Carolina Panthers in loans, plus $21 million from York County, $20 million from the city of Rock Hill, $15 million from a parking lot sale next to the Charlotte’s downtown stadium that was bought and sold by Tepper Enterprises and DT Sports Holdings for $60 million, Hickman testified during cross-examination of Roeschenthaler.
Site still under study for other uses
Hickman’s testimony on Wednesday and case documents reviewed by The Herald and Charlotte Observer show that GT Real Estate is considering alternatives that include possible third-party redevelopment of the site, sale of company assets or liquidation of assets.
Hickman said in testimony Wednesday that the bankruptcy “does not mean that other uses are not being considered for the site.”
“All options are on the table,” Hickman said Wednesday.
The real estate company created by Tepper is contacting experts on the value of the property and researching alternatives for its use, even as the real estate company is bankrupt, according to court documents.
At least two real estate companies requested information from the site, according to court documents.
The 240-acre project along Mount Gallant Road adjacent to Interstate 77 was meant to include mixed-use retail, offices, and several other land uses. A new interchange is being built on I-77 near the site.
What happens now?
There were at times as many as 20 lawyers from different companies and governments involved in the case during Wednesday’s Zoom hearing before US Bankruptcy Court Judge Karen Owes of Delaware.
Wednesday’s hearing which continued into the late afternoon and could continue into Thursday is just the latest legal action in a flurry of motions and hearings in the case. Owens has yet to approve a final settlement over property and debts, according to bankruptcy court documents. It’s still unclear when that decision will happen.
It’s also unclear if Owens will keep the case.
Creditors want case moved to South Carolina
MBM, York County, Rock Hill and other creditors want the case sent to federal bankruptcy court in South Carolina because taxpayers and residents of the city, county and South Carolina are the most affected.
A date for a hearing on changing the location of the bankruptcy remains pending.
In a separate South Carolina civil lawsuit filed earlier this month, York County sued Tepper Sports Holding and the City of Rock Hill in a bid to recover the $21 million. That lawsuit, in which York County called the Panthers’ site a “failed vanity project,” also remains pending.
Charlotte Observer reporter Gordon Rago contributed to this report. This is a developing story, check back for updates.
This story was originally published June 29, 2022 3:07 p.m.