The developer of the Carolina Park tract in Mount Pleasant sought bankruptcy protection Monday, delaying a court-ordered auction of the 1,200-acre property that was to take place today.
Carolina Park Associates LLC listed debts of between $10 million and $50 million in its filing.
The property, which is off of U.S. Highway 17 at the north end of Mount Pleasant, was scheduled to be sold to the highest bidder today at a Charleston County foreclosure auction.
Financial troubles arose at Carolina Park Associates last June when the developer began missing payments on its mortgage. In August, Palmetto Debt Holding Group LLC bought that loan from the National Bank of South Carolina for an undisclosed amount. It then filed a lawsuit to take ownership of the largely undeveloped tract.
The value of Carolina Park Associates' mortgage is estimated at $26.8 million.
The bankruptcy filing puts the sale on indefinite hold.
"It's not what we wanted, and we'll just have to deal with it the best we can," said David Swanson, Palmetto Debt Holding's attorney.
He said his client's main objective now "is to get it out of bankruptcy, if possible."
Columbia attorney Geoffrey Levy, who represents Carolina Park Associates, said the auction that had been set for today forced the developer to seek bankruptcy protection.
"We believe there is substantial value that a foreclosure sale would not enable the company to realize," Levy said. "Allowing it to go into a foreclosure was not an acceptable option. We hope to be able to sell the property, refinance it or develop it."
The next step in the process is a meeting of the company's creditors, which has not been scheduled.
The developer is half owned by Republic-Charleston LLC of Fairfax, Va., and Johns Island-based MDC of Charleston LLC, which is registered to investor Ben Marino.
Monday's filing was signed by David L. Peter of Republic-Charleston, which is the managing member of Carolina Park Associates.
Marino's MDC of Charleston is listed as the developer's largest unsecured creditor, with a nearly $2.6 million claim.