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The Illinois Star Centre shopping mall in Marion is likely to feel the impact from construction of additional retail space near the mall.

MARION — Lawyers for the Illinois Star Centre Mall LLC on Monday filed an adversary complaint against the City of Marion, according to a news release from a managing partner of the mall.

Illinois Star Centre LLC filed for bankruptcy on May 4.

The complaint seeks an equitable accounting from the City of Marion as it relates to the financing of the Illinois Star Centre Mall and surrounding area in Marion.

Dennis J. Ballinger Jr., the managing partner who provided the news release to the newspaper, said he authorized the filing of the adversarial complaint because the city would not voluntarily cooperate with requests for additional financial information to determine what, if anything, was still owed on the bonds related to the development of the mall and surrounding area.

Ballinger said he informed the city that the additional information was needed because a potential buyer of the mall had been identified and needed the information to perform its due diligence.

According to the release, attorney Paul T. Slocumb of Hoffman & Slocomb LLC said that a review of the available ordinances, financial documents and bonds related to the financing of the mall reveal potential fraud.

In the release, Slocumb said results of that review showed that:

● There are several unexplained transfers, totaling several million dollars, out of designated accounts that were established to fund the development of the mall and surrounding area.

● The city continues to assess and levy taxes on the mall when it appears that all of the bonds related to the development of the mall and surrounding area have been satisfied.

● It does not appear that the bond fund proceeds that were earmarked for the development of the mall and surrounding area were used in accordance with the requirements of Illinois’ Special Service Area Tax Law.

● It appears that the city has improperly commingled bond fund proceeds.

● It appears that the city unfairly gerrymandered the special service area established to fund the development of the mall and surrounding area, which unfairly burdened Illinois Star Centre LLC with all of the tax liability, while arbitrarily excluding three of the four anchor stores and other surrounding businesses that clearly benefited from the improvements.

● It appears that the city assessed a 1 percent sales tax on the Illinois Star Centre LLC property to retire a series of general obligation bonds even though the city previously enacted an ordinance that specifically excluded such property from additional taxation.

According to the U.S. Courts website, certain categories of relief may be granted in a bankruptcy court only through an adversary proceeding. The usual focus of the adversary proceeding is a trial of the allegations made by the plaintiff against the defendant.

According to Marion City Clerk Alice Rix, city employees and officials have been advised that they may not comment on the Star Centre Mall lawsuit. Calls to Marion City Attorney Steve Green were not returned.

618-351-5074

barb.eidlin@thesouthern.com

On Twitter: @barbeidlin

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