Boatworks at Tahoe LLC, which operates Boatworks Mall and the adjacent 34-room Inn at Boatworks on Lake Tahoe’s North Shore, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of California on Aug. 11. The filing was made to prevent a foreclosure auction scheduled for Aug. 12. The company listed between $10 million to $50 million in assets and debts.
Citizens National Bank of Texas initiated the foreclosure process in January after filing a notice of default on a $14.4 million loan. The bank cited the debtor’s failure to pay property taxes and provide proof of insurance. The property is managed by San Francisco-based firm MJD Capital Partners, which acquired it in 2019 with plans for redevelopment. A proposed rebuild planned for 2024 would have included an 80-room hotel, 31 condominiums, and 8,000 square feet of retail space, but the project did not proceed.
MJD Capital Partners stated that the Chapter 11 reorganization would allow the business to remain operational while restructuring its assets. The automatic stay triggered by the bankruptcy filing prevents all legal actions against the debtor during the proceedings. The property houses various tenants including boutique shops, jewelry stores, candy and chocolate shops, sports museums, and a library branch.
Boatworks Mall, which opened in 1978, follows a broader pattern affecting upscale retail properties. Blackhawk Plaza in Danville, California, similarly filed for Chapter 11 protection in March amid defaulted loans and legal disputes. The investment firm that purchased Blackhawk Plaza in 2020 for $28.3 million subsequently defaulted on multiple loans totaling $36 million. Both properties have experienced financial challenges linked to pandemic-related retail closures and the broader shift toward e-commerce in the retail sector.
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