Leading Investments consents to Chapter 7 bankruptcy

By Steve Green (contact)

Thursday, July 30, 2009 | 11:45 a.m.

Leading Investments Inc., a Las Vegas real estate development company, this week consented to creditors' demands that it be placed under Chapter 7 bankruptcy supervision.

Investors in the company filed an involuntary Chapter 7 liquidation case against Leading Investments in April and asked that the court allow them to examine its books and records. Bank of Nevada then moved to foreclose on a Leading Investments office building.

Leading Investments initially opposed the bankruptcy petition, but on Tuesday its attorneys filed paperwork consenting to Chapter 7 supervision.

Bank of Nevada on Wednesday renewed its request to foreclosure on the office building, saying Leading Investments is in default on a loan backed by the real estate and that Leading Investments has no equity in the building. An Aug. 26 hearing was set on the bank's request.

In court filings, the bank says an appraisal found the building is worth $3.29 million and that Leading owes $4.236 million on the note. The bank says Leading Investments stopped making payments on the loan in June 2008.

The 13,672-square-foot, two-story office building is at 10789 West Twain Ave.

``The bank’s interest in the property is not adequately protected. Moreover, the debtor has no equity in the property and it is not necessary to an effective reorganization,'' Bank of Nevada attorneys wrote in papers submitted to the court.

Robert Barnhart is the president of Leading Investments while Ernie Domanico is a director. A message for comment was left Thursday with Barnhart.

In the petition against Leading Investments, investors said the company owns two pieces of real estate that back loans that are in default: The 10789 W. Twain Ave. building in Summerlin, near the 215 Beltway and Town Center Drive; and land in the northwest Las Vegas Valley at Lone Mountain Road and Pioneer Way, west of U.S. 95.

Petitioning creditor Mortgage Syndication Network said it's owed $21,450 for expenses related to finding financing for Leading Investments, investor Arthur Lansky LeVine said he holds a $500,000 note against the Twain property and investor Lee Medick said he holds a $400,000 note on the Lone Mountain property. LeVine said his note is secured by a third deed of trust while Medick's is secured by a fifth deed of trust. Leading Investments is in default on both investors' notes, the April petition said.

The investors said First Interstate Financial holds the first deed of trust on the Lone Mountain property and has also commenced foreclosure proceedings.

Barnhart, also the president of Red Rock Realty, has said the land at Lone Mountain and Pioneer Way is planned for a congregate care facility.

He has said the involuntary bankruptcy petition was "a dispute between a lender and a developer'' and that Leading Investments was working with its lenders to refinance the projects so they are not sold at trustee sales.

Brian Holthus, an attorney representing the creditors and investors in the April involuntary petition, on Thursday said the next step for the creditors is to study the financial dealings of Leading Investments.

One thing they'll try to determine is if there are any assets -- including money owed to the debtor -- that could be used to satisfy the claims of creditors, said Holthus, of the law firm Jolley Urga Wirth Woodbury & Standish.