Fairlane Town Center, less than two years into its new ownership, has avoided receivership.

A Wayne County Circuit Court judge on Jan. 8 denied a lender’s request that the Dearborn mall be placed under the control of Dallas-based Trigild Property Management LLC — which previously was the mall’s receiver under different ownership. Annette Berry, the judge, also said in her order that a fresh receivership request could be considered on or after Feb. 17.

Fairlane, built in 1976, has struggled financially for the past few years.

The Detroit Free Press first reported the decision on Friday.

An entity called PSOF WA Holding LLC, an affiliate of Atlanta-based Peachtree Group, sued Fairlane Town Center Realty Holding LLC, an affiliate of Great Neck, N.Y.-based Kohan Retail Investment Group, in late November seeking a receiver after an alleged default on a $28 million loan issued in April 2023.

In its lawsuit, Peachtree Group says Kohan — controlled by Mike Kohan — missed its $200,000 October payment, plus a $3,000 fee, as well as November’s. The complaint says Peachtree is owed almost $1.35 million as a result: the $400,000 in missed principal, the $6,000 in fees, late fees of $121,964 and interest of $819,639.

In addition, the lawsuit says that as of Sept. 30, Kohan was delinquent on property taxes totaling $2.96 million, and that the company had for several months been “diverting” about $400,000 in rent that was supposed to be deposited in a Peachtree Group-controlled account. The filing claims that Peachtree Group “confronted” Kohan about the alleged diversion of funds and he “did not dispute” the allegations.

The Wayne County Treasurer’s website says Kohan is delinquent on taxes totaling about $1.18 million on one parcel of the mall property.

In court filings, Kohan, through his Livonia-based attorney Dennis Harris, denied Peachtree’s claims about amounts of money owed, both on the loan and property taxes, as well as that he has been diverting payments that should have been deposited with the lender.

Kohan also says in filings there is $2.3 million in a lender-controlled account, and Peachtree failed to take November and December payments out of it.

“One can only assume that this is an attempt to declare a non-payment default,” Kohan’s attorney writes in court filings. “The plaintiff (Peachtree) has alleged that the defendant has mishandled rental payments but has failed to support this allegation in any way other than to state that rents deposited in the designated account are less than expected.”  

And Kohan says in an affidavit that he never admitted to “misappropriating rental payments,” that an “alleged misappropriation” of $85,000 was for snow plowing at the mall, and that there is not $400,000 in collected rents not being deposited to the Peachtree account.

Requests for comment were made with Peachtree Group and its attorneys at Varnum LLP in Birmingham, as well as Harris and Kohan.

Kohan, which has a long track record of letting the malls it buys fall into tax foreclosure, have their utilities shut off and accumulate blight tickets, paid $52 million for Fairlane in April 2023 after a brief ownership by Dallas-based Centennial Real Estate in 2022.

Prior to Centennial’s ownership, Fairlane Town Center had been owned by Miami Beach, Fla.-based Starwood Capital Group before the company fell behind on a $161 million commercial mortgage-backed securities loan and were sent into receivership. Starwood purchased Fairlane and the 600,000-square-foot Mall at Partridge Creek in Clinton Township plus five other malls in 2014 from what was then Taubman Centers Inc. (now Taubman Co. LLC) for $1.4 billion.

Although Kohan told Crain’s that Fairlane wouldn’t follow a similar path as his other malls, it didn’t take long for the past-due tax bill notices to start arriving. In less than a year, Kohan had fallen behind to the tune of $1.73 million.