The owners of an office building in Globeville once home to the startup Fluid Truck have fired back at their lender, who put the building into receivership last month.
In a countersuit filed earlier this month, developer Ryan Arnold and broker Ken Gooden — members of building owner 48th Office Investment LLC — say lender Independent Bank displayed “a hyperaggressive, if not hostile, posture” toward them.
They also allege the lender’s action forced them to quickly settle litigation they undertook against the startup, despite the litigation also being in the lender’s interest.
Arnold and Gooden bought the 95,000-square-foot Globe4Hundred office building at 400 W. 48th Ave. in Denver in June 2021 for $11.2 million. There was a third partner in their LLC: Fluid founder James Eberhard.
The group financed the acquisition with a $9.75 million loan from Independent Bank and took out an additional $455,000 from the bank the following year. Fluid, which had moved into the building shortly before the purchase, became the anchor tenant.
But things began to go awry in 2023.
That November, after Fluid hadn’t paid for its space for several months, the ownership group sued the company. It accused Fluid of not paying $800,000 in rent and fees and also of conning it into renting so much space to the company. It requested that a receiver be appointed to run Fluid.
Eberhard, meanwhile, filed his own suit in April 2024 against Arnold and Gooden, saying they pressured Fluid into taking more space and failed to let him know that the neighboring hotel would be used to house the homeless.
On May 2 last year, according to Arnold and Gooden’s new counterclaim, Independent Bank told them that their lawsuit against Fluid over rent meant their loan was now in default. The bank gave the ownership group 15 days to cure the default by resolving the litigation, the men claim.
“Lender declared the default despite the fact Borrower was current on its debt service payments to Lender and despite the fact the litigation against Fluid was commenced to compel Fluid to make its rent payments – which inured to the benefit of Lender,” Arnold and Gooden’s countersuit reads.
Additionally, even though Fluid wasn’t paying, the building was taking in more money than it spent, according to Arnold and Gooden.
Four days later, on May 6, the litigation against Fluid was settled, with Fluid agreeing to pay $732,000 in unpaid rent and extend its lease for a portion of its space, the counterclaim states. But on May 16, according to Arnold and Gooden, Independent Bank froze $225,000 of the building’s cash, and said it would “capture” a $175,000 payment that Fluid was due to make at the end of June.
It’s those moves that Arnold and Gooden consider to be hyperaggressive, if not hostile.
“Lender’s conduct was wholly unjustified. … Lender’s extreme and extraordinary conduct was undertaken in bad faith,” the counterclaim states.
In mid-October, Fluid Truck filed for Chapter 11 bankruptcy. A month later, as part of that process, the company’s lease at 400 W. 48th Ave. was terminated. By December, Fluid, which had raised at least $80 million from investors, was sold to a Utah firm for about $10 million.
On Dec. 20, the ownership-lender relationship deteriorated further. That day, Independent Bank placed an “administrative hold or freeze” on all ownership’s accounts with it, according to the counterclaim.
That threw the building operation into chaos, according to Arnold and Gooden. Checks to vendors bounced, and some threatened to stop providing services. Independent Bank also wouldn’t accept payments on the loans, despite funds being available, according to the men.
“Prior to freezing the accounts, Lender did not provide Borrower with written notice and an opportunity to cure an alleged default,” the counterclaim states. “Indeed, the Loans were not in default at the time Lender froze the bank accounts.”
The men say they were given two reasons for the bank’s moves. First, the bank anticipated that the ownership would be unable to meet a required debt service coverage ratio in the future. Second, according to the counterclaim, the bank didn’t think anyone would fill Fluid’s former space.
Arnold and Gooden allege that the bank had no information to support its first prediction. As for the second, the loan agreement specifically gave the owners 180 days to find a replacement tenant, according to the counterclaim.
The bank later “intimated” the accounts were frozen because ownership had placed funds in an attorney’s trust account. But the loan agreement didn’t forbid that, according to Arnold and Gooden.
On Jan. 21 of this year, the bank told ownership it was required to deposit nearly $700,000 into a lender-controlled reserve account, according to the counterclaim. That account was supposed to be set aside for leasing commissions and tenant improvements for a Fluid replacement, but the bank acknowledged it might apply the money to the loan instead.
Given the lender’s past actions, Arnold and Gooden declined to do so, according to their counterclaim.
More than a dozen Denver-area office buildings are in receivership. While public criticism of lenders by owners is rare, Arnold and Gooden aren’t the first to object to a bank’s tactics. Denver-based Zeppelin Development has repeatedly sparred with Wells Fargo, which put the Zeppelin Station building in RiNo into receivership last year.
The filing this month from Arnold and Gooden also makes claims against Eberhard, their third partner. Arnold and Gooden allege he caused Fluid to fail to abide by the May 2024 settlement agreement and misrepresented facts about the company, including its financial condition. Eberhard did not respond to a request for comment from BusinessDen.
Attorney David Laird of Fennemore Craig is representing Arnold, Gooden and the building LLC. Richard Beller of Fort Collins’ Ringenberg & Beller is representing the lender. No attorney has entered an appearance on behalf of Eberhard.
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