ABC Capital, which linked foreign investors with Baltimore homes, says it owes $4 million in judgments
By: Justin Fenton Published on: December 23, 2022 thebaltimorebanner.com
ABC Capital, the Philadelphia company that dozens of overseas investors say ripped them off in their purchases of distressed properties in Baltimore, disclosed this week that it owes nearly $4 million in judgments.
The disclosures came in bankruptcy proceedings in U.S. District Court in Pennsylvania, more than a month after the company filed for Chapter 7 protection but cited no assets or liabilities.
An attorney for the company told a judge last week that he was compiling an accurate accounting of their obligations, and that ABC Capital is preparing to file a new, Chapter 11 bankruptcy as soon as this week. In addition to the judgments, the company faces a slew of pending complaints in Pennsylvania, Maryland and Florida.
“It’s a company that is just riddled with litigation at the moment,” attorney Paul S. Peters III told the court.
By its nature, the bankruptcy filing throws into jeopardy the claims brought by investors who say they wanted to own, fix up and rent properties in Baltimore but were defrauded by the company. That, in turn, raises the prospect that the homes will languish and fall into further disrepair in areas badly in need of investment.
A spokeswoman for the city housing department said the agency has not undertaken any specific review of properties owned by ABC Capital investors, many of whom are thousands of miles away, do not speak English, and say they don’t know what to to do with properties that ABC had promised to renovate.
There are at least 14,000 vacant homes in the city. ABC says it has been involved in more than 1,200 transactions here, but those represent only a fraction of the thousands of vacant homes controlled by out-of-state owners, LLCs and defunct companies or dead people.
The city housing department “has not done a formal analysis of trends related to house flipping and foreign investments and the City had no sales to that entity,” spokeswoman Tammy Hawley wrote in an email. “The private investors who may have been scammed by ABC have taken the matter up in court.”
The Pennsylvania Attorney General’s Office denied a public records request from the Baltimore Banner on Thursday related to past complaints about ABC Capital. “While there is more than one consumer complaint filed with the OAG concerning ABC Capital Investment entities, and corresponding investigative materials that have been identified, the complaints and investigative materials are not subject to release,” Deputy Attorney General Sharon K. Maitland wrote. Maitland said the office did not want to reveal information related to the “institution, progress or result of an OAG investigation.”
Adam M. Freiman — a Baltimore bankruptcy attorney who is not involved in the case — said that in the vast majority of Chapter 7 cases, the debtor “has literally nothing, or, everything that the debtor owns can be protected or exempted.” The chances of creditors getting paid anything back are “very, very, very small,” he said.