Le Parisien Flats, a mixed-use development at 2309 Lyndale Ave. S., filed for Chapter 11 bankruptcy to reorganize its debts after a costly legal battle.
Developer Mark Dzuik sued the project’s first set of architects — who he replaced partway through construction — for malpractice. The litigation was successful, Dzuik said, but the legal fees were costly.
“At the end of the day the only way to reorganize and finish the project was to file Chapter 11 simply to reorganize debt," he said. “It’s not a funeral.”
Filing for Chapter 11 allows a debtor to develop a plan for reorganization to keep a business alive, according to the U.S. Courts website. It’s often referred to as “reorganization bankruptcy”
Le Parisien is a Paris-inspired project that started as a condominium building, but converted to rental when the housing market imploded. It also incorporates commercial space that is not yet filled.
The development is about three weeks away from completion, Dzuik said.