SAN JOSE — Bankrupt developer Sanjeev Acharya and his company Silicon Sage Builders have given up the battle to rescue their Bay Area real estate empire, court records show.
Acharya had filed a Chap. 11 bankruptcy case in January to reorganize his shattered finances, but that quest has now failed.
Issues with Acharya’s Bay Area real estate business came to light in December when the Securities and Exchange Commission filed wide-ranging allegations of fraud against Acharya and Silicon Sage Builders, the company that Acharya heads.
In February, a federal judge granted an SEC request to authorize a receiver to seize control of the properties and operations of Acharya and Silicon Sage Builders, the company that he heads.
Faced with the court-ordered loss of control over his Bay Area holdings, Acharya formally gave up his efforts to revamp his finances, court papers filed on March 2 show.
Acharya asked a U.S. Bankruptcy Court to convert his case from a Chap. 11 reorganization case to a Chap. 7 status that’s aimed at the liquidation of his and the company’s assets. Bankruptcy Judge Stephen Johnson granted the motion on March 5.
The fatal blow appeared to be the decision by U.S. District Court Judge Susan Illston to appoint receiver David Stapleton of Stapleton Group to take over all of the assets of Acharya and Silicon Sage Builders. The receiver’s actions included Acharya’s termination as principal executive of Silicon Sage Builders.
“The debtors are unemployed,” Acharya, his wife Mina Acharya, and Silicon Sage stated in court papers in connection with the bankruptcy case conversion.
Separately from all of these court maneuvers, multiple lenders filed notices of default in connection with delinquent mortgages to finance several Bay Area properties owned by affiliates of Acharya and Silicon Sage Builders.
Among the notable debts that were listed in the bankruptcy filing:
— $45 million for a construction loan linked to a property at 42183 Osgood Road in Fremont. New York state-based Acres Capital, through an affiliate, was listed as the lender.
— $40.7 million for a construction loan connected to a property at 1821 to 1873 Almaden Road in San Jose. Acres Capital provided the financing.
— $39.6 million for a construction loan associated with a site on Balbach Street in downtown San Jose. Silicon Sage Builders has developed and completed a residential complex at 180 Balbach in San Jose called Aura. Chicago-based Prime Finance Partners was listed as the provider of the loan.
— $13.9 million for a land loan at 37358 to 37482 Fremont Blvd., which is in the Centerville area of Fremont. Beverly Hills-based Bolour Associates is listed as the lender.
— $8.3 million for a land loan at 41965, 41911 & 42021 Osgood Road in Fremont. Bolour Associates provided the loan.
— $7.9 million for a construction loan and land loan for a site at 1313 Franklin St. in Santa Clara. Bolour Associates is listed as the lender.
— $5.98 million for a land loan at 2101 to 2149 Alum Rock Ave. in San Jose. Los Angeles-based Parkview Financial is listed as the lender.
— $4.9 million for a land loan at 510 to 528 S. Mathilda Ave. in Sunnyvale. Bolour Associates is the lender.
— $3.6 million for a land loan at 1368 El Camino Real in Santa Clara. On Jan. 11, lenders began foreclosure proceedings to seize the property through a notice of default filing for a $3.5 million loan that’s delinquent. The loan relates to the office and retail section of the property, which has been built and is known as Madison Park.
— $2.9 million for a building loan at 560 S. Mathilda Ave. in Sunnyvale. Acharya’s primary company, Silicon Sage, maintains its headquarters at this location.
— $1.8 million for a land loan at 1661, 1663, and 1665 Alum Rock Ave. in San Jose.
The Chap. 7 motion stated that Silicon Sage and Acharya faced tough sledding to craft a reorganization plan credible enough to win the court’s approval.
“The debtors believe that they are not going to be able to propose a confirmable plan given the total debt in the case and uncertain outcome to the federal receivership overseeing all entities in which they are involved,” Acharya stated in the bankruptcy filing.