Hiren Patel, the Texas doctor who developed the Arkansas Convention Center in Texarkana, Arkansas, filed Chapter 11 bankruptcy on Friday, adding to a string of financial setbacks for Patel and the convention center.
Patel and his wife Nila filed bankruptcy in federal bankruptcy court in Texas, claiming between $1 million and $10 million in assets and liabilities and between one and 49 creditors. Among those to whom the Patels owe money: BancorpSouth Inc. of Tupelo, Mississippi; BMW of North America of Phoenix, Arizona; the IRS; and M&T Bank of Dallas.
The day before the Patels filed individual bankruptcy reorganization, one of their companies, Texarkana Hotels LLC, the holding company for the convention center, filed Chapter 11 bankruptcy, claiming between $1 million and $10 million in assets and liabilities and between one and 49 creditors.
Among those creditors is Midsouth Bank of Lafayette, Louisiana. Midsouth filed a foreclosure petition in Miller County Circuit Court in October against Patel, his wife and Texarkana Hotels LLC, saying the Patels have defaulted on more than $10 million in loans used to build the convention center.
Previously: Convention Center woes still splitting Texarkana.
Midsouth's lawsuit seeks the center’s sale to satisfy the debt. But the Patels' bankrupcy filings automatically stay that request.
More detailed filings are expected later.
Last week's filings aren't the first time a Patel company has filed bankruptcy amid foreclosure proceedings.
In November, Krishna Associates LLC, filed for Chapter 11 bankruptcy reorganization. Krishna Associates owns a Country Inn & Suites in Texarkana, Texas. The bankruptcy filing came right before Midsouth sought a foreclosure sale of the hotel, saying the company defaulted on a loan.
The filing halted the foreclosure. On March 17, Bowie County, Texas, Circuit Judge Leon Pesek Jr. issued a summary judgment against the Patels because they had personally guaranteed the loan. The judge found the Patels owed Midsouth more than $2.8 million.
Arkansas Business reported in 2012 on plans by officials in Texarkana, Arkansas, to proceed with a convention center despite the opening on Oct. 5, 2012, of the $24 million, 25,000-SF Texarkana Convention Center on the Texas side of the city.
Those plans were spearheaded by Harold Boldt, who was then the Texarkana, Arkansas, city manager. Boldt searched and found a local investor, Hiren Patel, to develop a convention center on the Arkansas side.
Patel, with a lot of incentives from the city, finally got the $18 million convention center on the Arkansas side of the city up and running in August 2013, though the incentives prompted a look from the Arkansas Division of Legislative Audit.