The owner of a Mesquite apartment complex being sued by the city for widespread, chronic code violations filed for bankruptcy last week, according to Dallas County court records. The Chapter 11 bankruptcy filing came July 29, just days after lawyers for the landlord asked a judge to appoint a third-party to oversee what they called a “highly politicized” case.
On Tuesday, court records showed the city’s case against the landlord was inactive; a court coordinator confirmed on Thursday that the bankruptcy case stays all other proceedings until it is resolved.
An attorney for Hillcrest said in a statement on Monday that the owner felt they “had no choice” but to file for bankruptcy.
“Given the difficulties of obtaining a fair property improvement and repair agreement and further issues surrounding financing to facilitate property improvements, the LLC felt it had no choice but to protect and preserve its asset by filing for Chapter 11 Bankruptcy protection to provide a path forward that includes continuing to address the concerns of the residents,” a statement from the owner’s lawyer, Joyce W. Lindauer, said.
It’s unclear how exactly Hillcrest’s bankruptcy filing will impact the city’s case against the landlord, but Mesquite City Manager Cliff Keheley said in a statement that the city’s code enforcement office would continue to do its job.
“The filing of the bankruptcy does not impact the City’s commitment to ensuring repairs and maintenance continue at Hillcrest Apartments,” Keheley said in a statement. “We will continue to hold the owner accountable for ongoing neglect of this property.”
Residents of the Hillcrest Tenants’ Union, who petitioned the court to join the city’s suit in June, fear this means more delays in repairs and little resolution.
“To be perfectly honest, I feel like nothing’s probably changed,” said Brittany Jones, a four-year resident of Hillcrest Apartments. “Hillcrest found another loophole and another strategy to prolong stuff that was in their favor.”
Attorneys for the tenants have yet to confirm specifics of how this will impact residents.
“Legal Aid is working to understand the impact that the bankruptcy filing will have both on the state court case and the individuals that are not a part of this case — the everyday people who are dealing with the horrid conditions at those apartments,” said Julius Jenkins, an attorney with Legal Aid of Northwest Texas who is representing clients of the Hillcrest Tenants’ Union. “And we will do our best to minimize the impact of the bankruptcy filings on those people.”
The 1970s-era complex was sold by Summit Hillcrest Apt. Ltd. in Montgomery, Ala., in 2020 to CC Hillcrest LLC, which is managed by the private equity firm Code Capital Partners in Windermere, Fla. Jared Remington is named in the city’s suit as the manager of the firm.
The city of Mesquite sued the owners of Hillcrest Apartments in February after an outcry from tenants, who said the landlord had failed to fix chronic, widespread failures of air conditioning, heat, hot water and sewage systems. A judge ordered Hillcrest in March to pay for hotels for tenants who report code violations.
But residents say it’s no solution as they continue to live in limbo while the case is in the hands of the court. It’s unclear if the trial scheduled for January will be delayed.
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