South Bend redevelopment officials are trying to stop developer David Matthews from moving their lawsuit against him to federal bankruptcy court.
The city has been trying for over three years in state court to make Matthews pay it $7.5 million because he failed to include a grocery store and pharmacy at the 11-story 300 E. LaSalle apartment high-rise he opened in 2021.
The case had finally been set for an October trial but that was canceled recently because Matthews filed for bankruptcy protection in federal court. His bankruptcy filing lists a $30.1 million debt to KeyBank for the project, along with $4.5 million owed to Forum Credit Union. The filing also lists the city’s pending lawsuit.
But on Monday the city filed a motion asking Bankruptcy Judge Paul Singleton to send their case back to state court where the judge knows the case well. They said Matthews moving their case to his bankruptcy filing has the appearance of forum shopping, since he’s lost all major rulings so far in the state court case.
