Christensen Realty files bankruptcy

Last fall developer Gary Christensen dropped plans for a 23-story green building on Front Street so he could focus on two troubled condo projects in downtown Boise.

But he still wasn’t able to keep the projects afloat.
Christensen planned to renovate two 100-year-old buildings, the Gem & Noble Building at 10th and Main and the O.W. Smith warehouse at Eighth and Myrtle – now called R. Grey Lofts – and convert them into condo buildings with first-floor retail space.
But he ran into financial trouble on the projects. Contractor McAlvain Construction filed liens for $1.4 million on the Gem & Noble property and $1.8 million on the R. Grey Lofts. Subcontractors followed suit.
Sterling Savings Bank and Bank of the Cascades found Christensen Realty Investment II, the entity for Gem & Noble; and Loft Living Condominiums, the entity for R. Grey Lofts, in default on loans. The companies owe $2.7 million and $5.4 million in loans, respectively. On Feb. 6, one day before Sterling Savings was set to foreclose on the Gem & Noble property and put it up for auction, Christensen Realty declared bankruptcy.
McAlvain sued Christensen and his development entities for the projects last September and December. In both cases, the company sued for breach of contract and unjust enrichment and asked the court to foreclose on the lien.
McAlvain also asked the court to pierce the corporate veil for Christensen Corp., Christensen’s development company. McAlvain claimed it had reason to believe Christensen Corp. was kept as an under-funded company to avoid paying contractors and that Christensen and his investors had not properly maintained their corporate structure or separated their individual assets from the company’s. Therefore, McAlvain argued, Christensen and his investors should be liable for Christensen Corp.’s debts.
Christensen and McAlvain’s attorneys have argued that point, disagreeing over whether piercing the corporate veil can even be brought as a claim. Christensen’s attorneys have declined to turn over all the information that McAlvain’s attorneys asked for in the discovery process, calling it a fishing expedition.
McAlvain’s attorneys say they need the information to prove that the court should pierce Christensen Corp.’s corporate veil, but Christensen’s attorneys claim McAlvain first needs to show some basis for believing that the corporation and its owners and investors are so interrelated that they should not be considered separate entities.
Christensen did not return calls.