Boulder judge orders delay of foreclosure sale

BOULDER — A public trustee foreclosure sale that was supposed to happen today has been moved to June 29 and may be moved again.

A court order filed Tuesday vacated the planned June 15 trustee sale, and the county public trustee set the June 29 date pending potential additional litigation in the matter.

The issue involves property at 1002 Walnut St. in Boulder. The owner of the property, George Williams LLLP, signed a promissory note for $5.78 million that was secured by a deed of trust on the property. When terms of the note were not met, the lender, 1002 Walnut Investments LLC, moved to foreclose on the property. 

The debt is not in dispute, but the manner in which the foreclosure sale is to occur caused George Williams to request a temporary restraining order. The owner of the property that includes multiple units wants the units sold sequentially until the debt is paid. The lender seeks to invoke terms of the deed of trust that gives it the right to sell the entire property. 

The judge in the case, Patrick Butler, issued three orders, each one modifying the one before. As things stood Monday night, the judge, “troubled by the timing” of the case coming before him just two days before the trustee sale, denied the restraining order request and said the sale could go forward with money raised above what was owed to be placed in a trust account. 

However, after business hours on Monday, the property owner filed a reply to the judge’s order in which it claimed that “generally, it is the foreclosing lienholder which is the successful bidder” at the sale and thus would gain an $11.3 million asset to satisfy a $6.5 million debt [the original loan amount plus interest].

The judge followed Tuesday with another order, this one reversing the previous order and vacating the trustee sale.

“The court does not appreciate being put in this last-minute position,” Butler wrote. “If defendants have to continue the foreclosure sale in order to sell the properties sequentially, they shall do so. However, defendants are awarded reasonable attorney fees and costs for the time spent to respond to plaintiff’s motion…”

The order does not address 1002 Walnut’s position that the deed of trust gave it latitude to control the nature of the sale, which the defendant quoted in its response to the restraining-order motion. David Laird, MoyeWhite attorney for the defendant, told BizWest today that he was unable to comment on pending litigation.

Thysson George Williams, a partner in George Williams LLLP, sent an email to BizWest Tuesday night complaining about the report BizWest published Tuesday. He offered to speak to BizWest but did not respond to a call placed early Wednesday.

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