Legal argument derails development auction for fourth time
The auction of a North Cambridge apartment development has been delayed a fourth time — to June 10, nearly nine months after its first scheduled date — after a legal filing by a bankrupt real estate magnate.
Joseph Perroncello, who began developing the Cambridge Crossing site at Yerxa Road and Rindge Avenue more than six years ago, argued to a Boston bankruptcy court judge that only Webster Bank had the right to auction off the property. But on May 9 the bank sold the mortgage for the $15.5 million property to Broder Properties, of Boston and Weston, and Perroncello says Broder’s estimated $9.1 million purchase didn’t get the rights to an auction along with the mortgage.
Broder’s lawyer rejected that argument in a filing today.
The agreement between Perroncello and Webster Bank, in which the developer was to pay the bank either $9.3 million by March 28 or $9.9 million by May 13 to hang onto the 63-unit site, “contemplated the sale of Webster’s note and mortgage” by saying the “claim ‘shall be binding on any purchaser … with respect to a foreclosure sale,’” wrote James F. Coffey, of Boston’s Nutter McClennen & Fish LLP.
“This restrictive language would have been unnecessary absent an expectation by the parties that the note and mortgage might have been sold,” Coffey said.
The restrictive language does apply, said the developer’s lawyer, but the allowances granted by the agreement don’t — because the agreement doesn’t say so specifically.
And now Webster doesn’t have the right to auction off the property either, said A. Davis Whitesell, of Everett’s Mestone Hogan LLC.
In a finding filed at 2:15 p.m. Thursday, Judge Frank J. Bailey apparently agreed. As of now, the auction remains rescheduled for 11 a.m. June 10 at the 2.2-acre, L-shaped site at 120 Rindge Ave., once a Catholic school and convent.
Several people showed up at the site hours earlier, only to hear their auction had been delayed again. They were approached individually by a man “demanding and recording names,” according to resident Charles Teague. When asked, the man said he worked for “Joe.”