DALLAS-A federal court has dismissed a bankruptcy court appeal from the developer of The Harbor at Rockwall, clearing ailing Texans CU to sell the mixed-use development it financed with a $28-million member business loan, which has grown to a $31 million debt after interest.
The U.S. District Court ruled the bankruptcy court's denial of a reorganization plan submitted by the developer, Mariah Bay Leasing, is moot because the bankruptcy case already has been converted from a Chapter 11 reorganization to a Chapter 7 liquidation, and because Mariah Bay no longer owns the property, which was purchased by Credit Union Liquidity Services, the credit union's MBL CUSO, in a foreclosure sale last October.
The U.S. District Court is where rulings from the U.S. Bankruptcy Court are appealed.
The ruling effectively gives the one-time, $2-billion Texans, which has been run under NCUA conservatorship since April 15, clearance to sell the troubled development and recoup some of its investment.
The Harbor is a mixed-use development on the shore of Lake Ray Hubbard, which is just outside Dallas.