Just hours after hundreds rang in the New Year at Top of Kress, the popular downtown nightclub closed its doors.
Frank Ruiz, principal partner of Desert Best Enterprises, which owns the property, “has voluntarily surrendered the Top of the Kress back to secured creditor AEA Federal Credit Union, effective today,” Ruiz's attorney, Robert Cook, announced in an email Tuesday to the Yuma Sun.
“Frank R. Ruiz acknowledged that a voluntary surrender and smooth transition is in the best interest of all parties,” the email continued. “Mr. Ruiz thanks all of his employees, supporters and patrons for their support.”
Rick Quinlan, manager for Mitchell's Merchant Patrol, confirmed that the firm had private security guards at the property, 284 S. Main St., over the weekend on behalf of AEA.
Meanwhile, a trustee sale of the real property has been scheduled for 10 a.m. March 22 on the steps of the Yuma County Courthouse.
AEA was granted a security interest in the property as collateral for loans totaling $7.2 million to purchase and renovate the historic downtown building. Top of the Kress occupied the upper levels and the ground floor is rented to DaBoyz Italian Cuisine.
Desert Best Enterprise filed for Chapter 11 bankruptcy on July 1, 2010, just four months after Top of the Kress opened its doors. On Nov. 23, 2011, the bankruptcy court issued an order dismissing the Chapter 11 case, leaving AEA free to enforce its rights and remedies.
On Dec. 16, AEA had applied to the Superior Court of Yuma County for a receiver for the property and improvements to it to “maintain and protect the property and to collect all rents and proceeds from the property.”
The application states that Desert Best Enterprises had granted to AEA a security interest for all rents, issues and profits derived from the property. However, the legal document states, “Despite demand, DBE has failed and refused to pay AEA rents and proceeds derived from the property. ... Upon information and belief, Ruiz has been using the proceeds from the Top of the Kress for his personal use.”
Ruiz currently is awaiting sentencing after pleading guilty in June in U.S. District Court in Phoenix to charges of transactional money laundering and conspiracy for his role in the misuse of the credit union's funds that contributed to its insolvency. His sentencing is scheduled for March 12.
Joyce Lobeck can be reached at firstname.lastname@example.org or 539-6853. Find her on Facebook at Facebook.com/jlobeck or on Twitter at @YSJoyceLobeck.