CHAMPAIGN — A Champaign apartment rental business has filed for Chapter 11 bankruptcy protection.
Bay Harbor Apartments LLC is seeking to reorganize its debts as a result of the March 18 filing in U.S. Bankruptcy Court in Danville.
The company, represented by Champaign attorney Brett Kepley, reported total assets of $2.89 million and total liabilities of $8.82 million.
The assets include Bay Harbor's 11 apartment buildings on Edgebrook Drive, Kiler Drive and Briar Lane in Champaign.
That development lies west of the former Holiday Inn/Gateway Studios complex at 1505 N. Neil St., C.
Gerald W. and Lynne Hartman of Loda are listed as the members of the limited liability company.
Roughly half the liabilities are secured claims, while the other half are unsecured nonpriority claims, according to the filing.
Kansas-based Midland Loan Services was listed as the sole creditor holding secured claims.
The largest single unsecured claim — $4.25 million — was held by Stabilis Fund II. That entity filed a foreclosure suit last November, naming Bay Harbor Apartments as a defendant.
Kepley said the Chapter 11 filing stopped that suit. He said the bankruptcy filing was prompted by "tough economic times" in recent months but added that "the apartments are filling up now."
He said Bay Harbor intends to come up with a reorganization plan and new structure for paying down the debt.
A meeting of Bay Harbor Apartments' creditors has been scheduled for noon April 23 in Room 208 of the Federal Building in Danville.
According to a 1992 News-Gazette story, the Hartmans acquired the apartment buildings and remodeled them, with the goal of providing housing at below-market rates to tenants who wanted a decent place to live.
Rents for the apartments range from about $300 a month to $500 a month, according to the bankruptcy filing.
Each apartment building is named for a different bay: Biscayne, Chesapeake, St. Andrews and Frisco (all on Edgebrook Drive); Mobile, Monterey, Montego, Galveston and Pensacola (all on Kiler Drive); and Tampa and St. Louis (both on Briar Lane).
In its statement of financial affairs, Bay Harbor Apartments LLC listed income of $583,411 in 2011, $621,194 in 2012 and $100,747 in 2013.