PAGE 16 San Antonio Business Journal September 10, 1990 SECTION: Vol 4; No 34; Sec 1; pg 1 LENGTH: 995 words HEADLINE: Two Rosenberg Partnerships File for Chapter 11 BYLINE: Donna Tuttle DATELINE: San Antonio; TX; US BODY: Two real estate partnerships involving Stanley Rosenberg filed for Chapter 11 reorganization in U.S. Bankruptcy Court in San Antonio last week. The partnerships' financial troubles represent the most recent slip for Rosenberg, an influential lawyer, banker and real estate developer. In the past year, several of his local investments have been hampered by financial or legal problems. MRD Joint Venture, located at 3330 Oakwell Court, filed its petition for Chapter 11 on Aug. 30, listing Rosenberg as its general partner. The joint venture owns about 400 acres of raw land in the Bulverde Road area, 90 of which are valued in excess of $ 1.1 million, according to information pulled from the 1990 tax rolls by Hollerbach & Associates, a local real estate information service. Debts and assets for the group were not available; however, the bankruptcy petition estimated both to be in excess of $ 1 million. Original members of the partnership and the guarantors on loan notes to a lender include Bernice B. Denton, individually and as trustee for the Lloyd A. Denton Sr. Trust; Wulfe Investments; and Harold Cooper, M.D., according to information listed on deeds of trust. Culebra/1686 Ltd., also a real estate partnership, listed 711 Navarro St. as its address, the same location as local law firm Oppenheimer, Rosenberg, Kelleher & Wheatley Inc., where Rosenberg is a name partner. The Culebra venture owns 1,686 acres of land in Bexar and Medina counties valued in excess of $ 2.5 million, according to the 1990 city tax role. Original members of the Culebra venture listed as guarantors on a loan note originally made by San Antonio Savings Association include Rosenberg; Wulfe Investments; Charles Horowitz; Harold Cooper, M.D.; Bernice Denton, individually and as trustee for the estate of Lloyd A. Denton Trust; and Tom Benson Jr. Liabilities and assets of the partnership were not available in the petition. Unsecured creditors of the Culebra venture include The Aykroyd & Simons Interest/Peyton McKnight Joint Venture; Concord Oil Co.; First Gibraltar, FSB, PAGE 17 San Antonio Business Journal 1990 UMI/Data Courier as receiver for San Antonio Savings Association; Laredo National Bank; Saratoga Land Co.; and Wulfe Investments. In a telephone interview this week, Rosenberg said that while he is the general partner in the Culebra joint venture, he is only a partner in the MRD partnership. In addition, Rosenberg said, he does not own a majority in either partnership. Chapter 11 gives the debtor immediate relief from creditors and time to reorganize its payments through the courts while the partnership continues to operate. However, Chapter 11 is a sign that the partnerships have hit a cash crunch. For Rosenberg, these Chapter 11 filings are the latest in a string of several investments gone awry. However, he says the reorganizations will have no effect "whatsoever" on any of his other business investments. In February, a $ 5.5 million property owned by Rosenberg was posted for foreclosure. The Danbury Square Apartments at 2727 Danbury St. was foreclosed on in March by the lender on the property, Sunbelt Savings, a Dallas thrift. At that time, Rosenberg told the Business Journal that the foreclosure was "uncontested." The apartments were owned by Kan-Mart Inc., a real estate group with the same address for Rosenberg's firm. Principals in Kan-Mart are Rosenberg, president; Vice President Kenneth Gindy; and Secretary/Treasurer Raymond Schneider. In May, another of Rosenberg's investments went sour when River City Fair Inc., a development built on the ashes of the old Turtle Creek Country Club, filed for Chapter 11 reorganization less than a year after opening. Rosenberg and Charles Barrett Jr., a San Antonio businessman, each own 25.5 percent of the venture, and Chip Armstrong owns 49 percent of the stock. The $ 3 million restaurant and entertainment complex on 3830 Parkdale Drive opened Nov. 1, 1989, amid much fanfare. The 70,000-square-foot complex, containing three restaurant areas and 100 amusements, such as miniature golf, shuffleboard, basketball and video games, was slated to cost $ 20 million when all phases of the project were completed. However, one month after River City Fair opened, construction companies, architects and material suppliers claimed that the center owed them nearly $ 1 million. By January, vendors and suppliers were filing suit against River City. And in May, River City filed for Chapter 11 reorganization. In the most recent turns of Rosenberg's investment plans, two original partners in his Express Pawn shop chain, David Saks and Doyle Spruill, were indicted on Aug. 22 on charges of alleged savings and loan fraud. The charges, brought by the Dallas Bank Fraud Task Force, allege that Saks and Spruill fraudulently negotiated a loan in 1984 with Security Savings Association of Texarkana to acquire and develop 336 acres in Corpus Christi. According to the indictment, the developers diverted $ 5 million from the loan to a third partner, who gave the money back to the S&L to fend off federal regulators examining the ailing thrift. Each man faces a maximum prison term of 40 years. PAGE 18 San Antonio Business Journal 1990 UMI/Data Courier Saks and Spruill were founders of Express Cash International Corp. along with Rosenberg, Barrett, and Ronald Shaw, a lawyer with the firm Bailey & Shaw. In November 1989, Saks and Spruill resigned as directors and officers of the company, according to a June 1990 Express Cash prospectus through which Rosenberg is attempting to take the company public. Shaw said the indictments of Saks and Spruill will not affect the public offering adversely because the two men never had any ownership interest in Express Cash, and do not have any affiliation with the pawnshop chain now. Shaw's statement was confirmed by the public offering underwriter, Commonwealth Associates in New York. Shaw also said that the company's underwriter was of the opinion that Rosenberg's Chapter 11 filing for his two partnerships would not tarnish the offering. GRAPHIC: Personal portrait SUBJECT: Real estate; Limited partnerships; Bankruptcy; Attorneys; Investments; Losses; Southwest NAME: Stanley Rosenberg GEOGRAPHIC: Southwest Region; San Antonio; TX; US COMPANY: MRD Joint Venture; SIC: 6510 Culebra-1686 Ltd; SIC: 6510 Kan-Mart; SIC: 6513 River City Fair Inc; SIC: 6552;7993 LOAD-DATE-MDC: October 12, 1990 ---