Latitude Five25’s bankruptcy is challenged
Columbus urges court to dismiss owners’ filing
The Columbus City Attorney’s Office has filed a motion in federal bankruptcy court in New Jersey to dismiss a bankruptcy filing by the owner of the Latitude Five25 apartments, which the city said is trying to avoid paying a more than $4.38 million court judgment.
“The ownership group at Latitude Five25 ruined the lives of tenants and are now trying to evade any responsibility for their actions by skipping town and running off to New Jersey to declare bankruptcy,” Columbus City Attorney Zach Klein said.
The city attorney’s office said that the owner, Paxe Latitude, filed for Chapter 11 relief in New Jersey on Feb. 20, days after being held in contempt of court in Columbus.
In its motion, the city is asking the federal court to dismiss the bankruptcy filing, arguing that it was made in bad faith so it could avoid the fines and appointment of receiver.
If the case continues, the city is asking the court to clear the way for a receiver to be appointed for the property while the case is pending so maintenance can continue and crews can work on fixing code violations and removing asbestos.
In its filing, the city called Paxe Latitude’s bankruptcy petition “skeletal,” saying: “...the Debtor is so disheveled that it is apparently unable to make even the most basic disclosures timely in this bankruptcy case. Permitting this Debtor to remain in possession of its Property and other property is simply irresponsible.”
On Feb. 16, Franklin County Environmental Judge Stephanie Mingo held Paxe Latitude in contempt of court for violating court orders while ordering the
company to pay $4.3 million in fines and repayment fees, calling the situation at Latitude Five25 “completely preventable.”
In January, Paxe Latitude said it would find a buyer for the Sawyer Boulevard property after city inspectors said the building was too unsafe. There were burst water pipes after the heat failed during subzero days around Christmas. Before that, there were years of problems with broken elevators, power outages, no hot water, rats and roaches, and garbage issues.
That left residents scrambling to find housing at the end of 2022, with some living in hotels and emergency shelters, other with friends and family. About 40% of the 394 units were occupied as of Dec. 25, the city said.
The city’s filing said that of the 194 evacuated tenants, only 82 have found permanent housing elsewhere while 103 are still living in motels paid for by the city and Franklin County. In its filing, the city said the temporary housing and other costs required to care for the tenants are estimated to be $391,255 through Feb. 24.
Built in 1963, the complex was once public housing known as Sawyer Towers. The Columbus Metropolitan Housing Authority sold the twin towers to a private buyer in 2009. Paxe Latitude later acquired it.
“If you’re a business owner or landlord that harms Columbus residents, we’re going to go after you,” Klein said in his statement. “The city will use every legal tool we have to ensure this judgement is paid, tenants are made whole, and management of the towers is transferred to a receiver.” mferench@dispatch.com @Markferenchik