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Door is now open for appeals in foreclosure of downtown buildings

By Bob Freund

freund@postbulletin.com

Attorneys now can launch appeals in the multi-year case over foreclosure of two commercial buildings and a shopping mall in downtown Rochester.

No one is knocking at the door of the Minnesota Court of Appeals yet, according to the court office. But lawyers in the case said during a 12-day trial in May that they expect to take it to the higher court.

On Monday, Olmsted District Court administrators entered a July 28 judgment ordering foreclosure to satisfy about $59 million worth of mortgage debt owed on Radisson Plaza Hotel, Galleria Mall shopping center and U.S. Bank Building at 155 First Ave. S.W. Judge Joseph Wieners subsequently added some of his mid-case orders, which had been scheduled to take effect after any foreclosure or debt repayment.

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The financier behind the mortgage, pension giant Teachers Insurance and Annuity Association of New York, sued the owners, local developer Gus A. Chafoulias and his BGD5 Ltd. partnership in fall 2002.

The suit largely went against Chafoulias, with Wieners ordering a sheriff's auction of the properties, and Teachers prevailing on most counts. Wieners also disallowed a $16 million award to Chafoulias that was proposed by a jury acting in an advisory role.

In effect, the official notice of judgment started a 60-day clock running. During the two-month period, lawyers for either side can contest the orders before the court of appeals.

Chafoulias previously had said he and his lawyers had not decided whether to appeal the court's ruling. He said in a phone message late Wednesday that he had no information to add.

No officials were available to comment late Thursday, a Teachers spokesman said.

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