VOL. 127 | NO. 213 | Wednesday, October 31, 2012
Beale Street Bankruptcy Ruling Clears Way for City Control
By Bill Dries
More than two years after the city of Memphis reached a settlement with the company that managed and developed the Beale Street entertainment district, a federal bankruptcy court ruling Tuesday, Oct. 30, cleared the way for the city of Memphis to regain day to day control of the district.
U.S. Bankruptcy Judge Jennie Latta ruled that Performa Entertainment Real Estate Inc. is not in default of its sublease with the Beale Street Development Corporation. With that finding, Performa, which has managed and developed the city-owned properties since the renovated district opened in 1983, can now reassign its lease to the city of Memphis.
The claim by BSDC, which acted as a middleman between the city of Memphis and Performa by virtue of its master lease with the city, has held up plans by the city to plan and move to a second phase of development for Beale Street between Second and Fourth Streets.
Memphis Mayor A C Wharton Jr. made the settlement of a multi-sided Chancery Court lawsuit a priority shortly after becoming mayor in 2009. He and Performa founder John Elkington negotiated a settlement in 2010 that included the departure of the company and Elkington from management of the district. Performa then filed bankruptcy reorganization as part of the settlement with a plan to assign the lease to the city.
Attorneys for the nonprofit BSDC contested that which after two years led to a two-day hearing before Latta that began Monday.
Still to come is a ruling from Latta on Performa’s settlement.