Waterstone Apartments Owners Facing Subpoenas

Directors of an Omaha-based Charity are facing subpoenas after the organization borrowed millions of dollars from the U.S. Department of Housing and Urban Development to build apartments in Panama City.

Directors borrowed $25 million from the government agency to build the 264-unit Waterstone at Panama City Apartments back in 2008.

The subpoenas ask Tapestry Group board members Gerald Keating, Michael Wilcox and Sam Murante to appear at a deposition, submit documents, and answer questions.

This comes on the heels of Waterstone at Panama City Apartments filing for Chapter 11 Bankruptcy Protection in April.

But, the bankruptcy is now being disputed after a Massachusetts-based lender called Lennox, declared that Tapestry lacked authority to seek bankruptcy protection.

Court papers also indicate the bankruptcy filing could conceal earlier fraud lawsuits against Tapestry.

Lennox continues to say Tapestry was found in contempt of court by a federal judge in Tennessee for failing to pay a contractor when they owed more than $5,000.

Lennox claims the bankruptcy case should be thrown out. A judge set hearings on the matter for next month.

Tapestry describes itself as an IRS tax exempt charity dedicated to housing development.