Owner of 18 Sioux Falls apartments declares Chapter 11 bankruptcy
SIOUX FALLS, S.D. (KELO) — Tzadik Management owns and operates 18 apartment complexes in Sioux Falls. The Arnolds Park Apartments is one of them.
The Chapter 11 bankruptcy documents were filed in the Southern District of Florida Bankruptcy court. They say Tzadik owes hundreds of thousands of dollars to local businesses.
Since buying the apartments starting in 2018, Tzadik has been the subject of hundreds of complaints from insect infestations to security issues. There have been so many complaints even the Mayor got involved and spoke to us in February of last year.
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'My office specifically is kind of fed up with all the complaints coming to me,' said TenHaken.
We also spoke with Tzadik Properties owner Adam Hendry last year. He told us the company spent millions of dollars fixing up the properties. The bankruptcy filing does not mean Tzadik will have to sell its properties in Sioux Falls. Chapter 11 bankruptcy allows business owners to reorganize their finances and continue operating while developing a repayment plan.
Secured creditors like banks are more likely to get their money, unsecured creditors like small businesses are usually last in line. According to court documents, the money owed to unsecured creditors includes $82.4 thousand to Sioux Falls utilities, $61.7 thousand to MidAmerican Energy and $52.3 thousand to Home Depot.
And the list of small businesses in Sioux Falls who may not get paid or get partial payment is a long one. For instance, Hendry owes Cressman Sanitation more than $17 thousand, Norberg Paints $9.3 thousand and Xtreme Cleaning Services $8.1 thousand.
Hendry's largest debt is to the Sioux Falls Law firm of Breit and Boomsma at more than 128 thousand dollars. Last month we told you that 3 of Tzadik's apartment properties were put up for sale as the company restructures. Tzadik reports $65 million in assets and $46.89 million in liabilities. The financial platform Bondoro, which tracks bankruptcies, says the filing indicated there will be funds available to pay unsecured creditors, but that remains to be seen.
Last month, Tzadik listed the Parkside Apartments, Sandy Creek Apartments and North Cleveland Apartments for sale, totaling 126 units.
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