The Meidinger Tower in Louisville Declares Bankruptcy

Located at 462 S. Fourth St, in downtown Louisville, Kentucky, the Meidinger Tower is now under court management due to numerous financial difficulties. Since last year, the tower’s owners have stopped paying their loan, and as of today, they have accumulated a debt of approximately $30.3 million.

In July 2024, its trustee, Wilmington Trust National Association, filed a lawsuit in the Jefferson Circuit Court for breach of the agreed trust payment and for neglecting repairs and necessary maintenance for proper operation. These actions pose a risk of reducing the value of the collateral.

The lawsuit also states that a $28 million loan agreement was signed in 2019, with a maturity date set for July 2029. However, since November, the owners have not made the monthly loan payments.

According to court reports, the lawsuit also requests an external manager to continue overseeing all building operations to prevent further damage that could lead to worse consequences. This request was granted by the court, and Farbman Group was appointed as the property’s receiver.

In response to the lawsuit, In-Rel Properties, the real estate company that owns the tower, stated that the missed payments are due to a significant decrease in tenants throughout the building, which has led to a substantial reduction in monthly rental income.

Meidinger Tower is a 26-story office building, and at the time the loan was agreed upon, it was almost fully occupied. However, since last year, its largest tenant, Computershare Inc., which occupied approximately one-third of the rentable space, vacated the office building, causing a sharp decline in income for its owners.

Meanwhile, Jonathon Margolis, senior vice president of the group, has not commented on the matter and has not made any decisions regarding the property. His duties include being authorized to sign new tenants, with the lender’s approval, and to market or sell the property if necessary.

According to real estate experts in the Louisville market, asset management companies often prefer court-appointed administration over facing foreclosure processes because their goal is to minimize liability and losses while attempting to salvage the troubled asset.

The building’s historical report indicates that these are not the only problems it has faced. In 2013, the property also encountered financial challenges and was sold at a foreclosure auction for $16.6 million. In 2017, it was sold again to its current owners for $32 million. Today, the tower is valued at nearly $28.6 million, according to Jefferson County records.

Available Foreclosures:

Louisville: 15

By Elias DaSilva | September 17, 2024.