The plan, filed in U.S. Bankruptcy Court last week by Tellico Landing LLC, projects that over the next four to five years more than $22 million in lots and tracts could be sold at Rarity Pointe, using new pricing and a new marketing effort. The plan is based on court approval of a loan worth up to $2.75 million from an entity called Heritage Solutions LLC.
Rarity Pointe is a waterfront project near U.S. Highway 321 in Lenoir City.
Earlier this year, Tellico Landing LLC filed for Chapter 11 bankruptcy protection just before a scheduled foreclosure auction of 184 residential lots, vacant tracts, a golf course and other property at Rarity Pointe.
An entity called Wind- River Investments LLC previously purchased the project's debt from SunTrust bank and scheduled the foreclosure auction. More recently, WindRiver has filed a motion in bankruptcy court asking for the appointment of a bankruptcy trustee to manage the operations of Tellico Landing.
In a memo last month, WindRiver alleged that when residential lots were sold at Rarity Pointe, the buyers paid deposits of $10,000 or $20,000 to an entity called LTR Properties, which was owned by developer MikeRoss and collected more than $4 million in deposits.
Those deposits, according to the filing, entitled buyers to membership in the Rarity Pointe Club and the use of amenities to be built at the club, including a clubhouse, swimming pool and tennis facility. The membership did not include golfing privileges, according to the filing.
The filing alleged that LTR committed a fraud upon lot purchasers by using those deposits to build a golf course rather than building club amenities.
In a filing of its own, Tellico Landing argued that lot purchasers were entitled to use amenities at the Rarity Bay community, located in Vonore, and said the extreme economic downturn severely restricted sales of lots and restricted LTR on its obligation to build out the amenities.
The filing went on to say that the reorganization plan envisions completion of the amenities and that membership initiation fees will be placed in escrow pending construction.
A separate filing last month said Tellico Landing owes principal of approximately $6.7 million to WindRiver, and needs $2.75 million in new funding to reorganize.
The primary use of that money, the filing said, would include "additional marketing efforts to aggressively market lots" at the project. A budget for the use of the $2.75 million included $1.1 million for advertising, an estimated $750,000 for county taxes and a $350,000 interest reserve for WindRiver.
Lynn Tarpy, a lawyer for Tellico Landing, said Heritage Solutions is an investor that "is willing to fund the project." He didn't identify that investor but said it was "from up North."
A filing by Tellico Landing estimates that the fair market value of the property — 184 lots, vacant tracts, a house, the golf course and the discovery center — is $30 million.
According to the bankruptcy filing, LTR Properties Inc. is a 50 percent member of Tellico Landing, while Robert Stooksbury and Ward Whelchel are both 25 percent members.
Stooksbury and Ross have fallen out over Rarity Pointe, with Stooksbury filing lawsuits in U.S. District Court and Blount County Chancery Court against Ross and other defendants.
In a bankruptcy court filing this month, Tellico Landing said Stooksbury and Whelchel approached Ross in September 2001 about joining the project after several failed attempts at designing a feasible development plan for the site.