MARION — In the latest round of challenges facing the Illinois Star Centre Mall in Marion, a Chapter 11 bankruptcy petition was filed Thursday, May 4, by Illinois Star Centre LLC.
Those challenges include a failed sealed-bid auction in November 2017, in which the buyer backed out of purchasing the property during the due-diligence period, and the 2015 conviction of Illinois Star Centre Mall owners or their relatives for a bid-rigging scheme in Madison County.
The bankruptcy petition refers only to what is effectively the center portion of the mall. Anchor stores Target and Dillard's, both of which own their own parking, as well as Sears, Pirate Pete’s and the remainder of the parking area are, as of now, unaffected.
Additionally, a case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy, according to a U.S. Courts website. This suggests that Illinois Star Centre LLC may be using this action to regain their footing in their quest to bring the mall into solvency.
Illinois Star Mall tenant Josh Stockinger, part owner of of Joe’s Records, said he was relieved to hear the bankruptcy was geared toward reorganization.
“Our business is doing really well at that location," he said. "We have grown and expanded, and used the proceeds from that to expand our business. We don’t want to leave and don’t have any plans to. We’re just waiting to see what is going to happen next.”
Stockinger said they have good foot traffic and regular customers at their location, and could only imagine how well the store would do with the vacant storefronts filled.
He said staff from his store had been in touch with mall management in the last 10 days to talk about the business' lease and future in that location. “All indications point to the fact that they are trying to make this work,” he said.
According to documents, the declared value of the debtor’s interest in the property, including real and personal assets, to be $5,605,127.04. Notices of the petition were sent to 37 different businesses and government agencies.
A list of top 20 creditors who have the largest unsecured claims include ASCAP Licensing, the City of Marion, the Williamson County Clerk and the Williamson County Treasurer, all of which are listed as unliquidated and disputed.
According to the American Bar Association, the Bankruptcy Code requires creditors to file a proof of claim if their right to payment from the debtor is contingent, unliquidated or unmatured. Corporate creditors in this action must file by Aug. 28, 2017, and governmental creditors must file by Oct. 31, 2017, according to the documents.
The mall is represented by Rob Eggmann and Tom Riske of the Carmody MacDonald P.C. who issued this statement on behalf of the embattled LLC: “Illinois Star Centre LLC filed A Chapter reorganization due primarily to financial problems caused by an ongoing dispute with the City of Marion regarding disputed bonds. The mall anticipates that it will be business as usual for all of stores and anticipates no interruption in service or change in the hours.”
In a 2016 report, companies associated with the Rochman family purchased the delinquent taxes of the Marion mall after a 2015 Williamson County tax sale. Barrett Rochman was one of the owners convicted in 2015, and has since served his time and been released. Rochman said he is no longer associated with Illinois Star Centre LLC.
In that sale, two parcels associated with Illinois Star Centre Mall were purchased from the county trustee by Roc Enterprises LLC. At the time, those taxes were the 2014 taxes due in 2015 in the amount of $478,000.
The mall property contributes in excess of $46,000 annually to the Marion Community Unit School District 2, so the purchase of these taxes effectively ensured that the local taxing bodies received those monies.
According to the Williamson County website, the owner has about two and a half years to make the payments on the taxes purchased, or the deed to the property can be transferred via court to the tax buyer. It is unclear if those taxes have been redeemed by Illinois Star Center LLC, or if Roc Enterprises is the current owner.
Spokesmen for companies previously associated with the property, Sansone Group, the St. Louis commercial real estate firm that once acted as leasing agent for the property, and Tranzon Asset Advisors, the auction company which handled the failed sealed-bid auction, said their firms declined to relist the mall for rent or for sale.
This story has been updated to clarify a quote from Stockinger and to clarify Barrett Rochman's role in Illinois Star Centre LLC.