Faced with multiple lawsuits alleging misuse and misappropriation of investor funds, a Los Altos-based developer has filed for bankruptcy.
The Sept. 29 filing by Vahe Tashjian, managing director of Dutchints Development LLC, comes after Dutchints defaulted on a $41 million loan and lost a 3.8-acre property at 5150 El Camino Real to receivership. At a Sept. 9 confirmation hearing with no competing bidders, a Santa Clara County Superior Court judge awarded the property to Prometheus Real Estate Group for $48 million.
Tashjian and a group of investors under 5150 ECR Group LLC had been offered $60 million and more for the property, according to court documents, but the receivership sale left nothing for the 26 investors to recoup. One investor estimated the group lost more than $16 million on the property. According to court documents, Tashjian allegedly passed on opportunities to sell because he wanted to maintain control of the property. Investors further claim he diluted investor profits and failed to divulge that the 5150 ECR Group had been insolvent since 2019.
The 5150 property, currently an office development that included Dutchints offices, has been cleared for a 196-unit condominium and townhouse complex. The project, approved by the Los Altos City Council in 2019, includes 28 affordable housing units.
Tashjian’s attempt to process a separate 5150 ECR Group bankruptcy filing prompted a stay in transfer of ownership, but a federal judge last week dismissed the bankruptcy, which included a 180-day bar on refiling.
Jon Biggs, Los Altos community development director, noted Prometheus representatives “have mentioned some possible changes (to the approved project) once they do have ownership, but nothing concrete has been filed with us yet.”
The Town Crier reached out to Prometheus for comment but had not received a response by the print deadline.