MARTINSBURG -- The Martinsburg Mall soon may be under the control of new hands because of the current owners' alleged inability to make four months worth of payments on a promissory note.
J.E. Robert Company claims the owners of the Martinsburg Mall have not made payments since Sept. 1, according to the complaint filed Dec. 23 in Berkeley Circuit Court.
According to the mall's September operating statement, it produced a negative net income of more than $11,000 for that month, the suit states.
"Upon information and belief, the Mall Property produced negative Net Income for the months of October and November, 2008, and will produce negative Net Income for December, 2008," the suit states.
J.E. Robert Company claims the mall is in danger of loss or misappropriation from the neglect, waste, misconduct or insolvency of its owners.
"Upon information and belief, Defendant has insufficient funds to manage properly the Mall Property and perform the required maintenance, capital replacements, leasing and other functions relating to the Mall Property necessary to comply with its obligations under the leases demising the Mall Property and with its obligations under the Loan Documents," the suit states.
More than two years ago, the Martinsburg Mall entered into a loan with CIBC in which the mall borrowed $80.9 million, according to the complaint.
But the mall has failed to pay its regularly scheduled debt-service payments due under the terms of the loan and has also failed to make the required monthly deposit to fund reserves for repairs, capital replacements and tenant improvements, J.E. Robert Company claims.
Because the mall has failed to pay amounts it owes, it is breaching its obligations under the terms of the loan, according to the complaint.
Its failure to pay the money constitutes an "Event of Default," so J.E. Robert Company is entitled to appoint someone else to run the property, it claims.
"Plaintiff has no adequate remedy at law because Defendant does not possess sufficient financial capacity to own and operate the Mall Property; accordingly, there is substantial danger of the loss in the value of the Mall Property and the loss or misappropriation of the rents, issues and profits thereof," the suit states.
J.E. Robert Company is seeking the immediate appointment of a special receiver authorized to exercise all power and authority otherwise vested in the Martinsburg Mall and other relief the court deems just.
William J. Powell and Robert E. Glenn of Jackson Kelly in Martinsburg will be representing it.
Berkeley Circuit Court case number: 08-C-1430