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Judge rejects city’s motion to dismiss Latitude Five25 owners’ bankruptcy claim

The city of Columbus’ motion to dismiss the bankruptcy filing of Paxe Latitude was rejected by a federal judge in New Jersey.

COLUMBUS, Ohio — The owners of an eastside apartment complex in Columbus are continuing with a bankruptcy claim after appearing in court Friday.

The city of Columbus’ motion to dismiss the bankruptcy filing of Paxe Latitude was rejected by a federal judge in New Jersey.

In the motion, the city asked the court to dismiss the filing because arguing that it was made in bad faith and made in order to evade the fines and appointment of a receiver to take over the property. Since the case is continuing, the city asked the court to allow the transfer to the receivership group to allow for continued maintenance, remediation of code violations and asbestos contamination at the complex.

City Attorney Zach Klein released the following statement:  

“We engaged in the bankruptcy proceeding in New Jersey because we wanted a seat at the table to fight for the tenants who deserve to be compensated for the years of mismanagement of Latitude Five25. Our commitment to the tenants hasn’t wavered, and we remain committed to each of them. Our position is clear: We need real money and concrete plan for the tenants and the future of the towers, and we will work with the owners and the court to get one done. We will meet with the owners’ representatives to flesh out these details, and remain hopeful for a final settlement that balances our priorities and delivers for the residents who continue to suffer due to the landlord’s gross negligence.”

Last week, the judge gave the owners one week to prove they have the funds necessary to repair the towers or possibly have their bankruptcy claim dismissed.

Latitude Five25 was evacuated on Christmas Day last year when some pipes burst due to the freezing temperatures, causing electrical damage.

The city condemned the complex after the buildings were found to be without potable water, heat and a working fire suppression system. Additionally, only one of four elevators are working.

On Feb. 16, the city announced Paxe Latitude was fined more than $4 million for violating provisions of a court order from January. The fines stem from ongoing litigation involving unsafe, unsanitary living conditions at the complex.

RELATED: Owners of Latitude Five25 fined $4.3 million, held in contempt

The owners filed for relief under chapter 11 of the United States Bankruptcy Code in New Jersey four days later on Feb. 20.

Paxe Latitude issued a statement Friday saying that they proved to a bankruptcy court that they have a plan and the funding needed to take steps forward immediately.

The full statement is included below:

“Paxe Latitude LP is committed to working with the court system, city of Columbus and community to resolve this matter and make things right. Today we proved to a bankruptcy court we have both a plan and the funding needed to take steps forward immediately. We know displaced residents and their families are continuing to be impacted and we will do everything possible to address the concerns of the community. We plan to take all steps to restore the Latitude Five25 property and support the tenants.”

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