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Originally published April 16, 2011 at 10:02 PM | Page modified April 17, 2011 at 10:35 PM

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Sunday Buzz

Troubles are mounting at HQ; condo projects reborn; another push in Mastro case

The New York Stock Exchange has threatened twice this month to delist Seattle-based HQ Sustainable Maritime Industries.

The New York Stock Exchange has threatened twice this month to delist HQ Sustainable Maritime Industries, a Seattle-based company that raises tilapia in China.

The first warning, on April 7, said trading in HQ's stock was stopped because it has not filed its annual report for last year.

Shares have not traded since April 1, when they closed at $2.78, near the bottom of its 52-week range of $2.65 to $6.48.

It had about 620 employees, mostly in China, as of its March 2010 annual report.

Last week, a second warning followed the resignation of Andrew Intrater as chairman of the board's audit committee, which leaves the company with too few independent directors and too few directors on its audit committee.

In a resignation letter, Intrater said he had lost faith in management, which he said has delayed and resisted providing information about the company's accounts and customer positions.

Intrater wrote that he was thwarted in trying to launch an independent investigation into whether a "possible breach of procedures" extended beyond a handful of incidents.

HQ said in a securities filing last week that it was preparing a response to the letter.

It also said it will replace Intrater on the board as soon as possible, and is working on a plan to file an annual report by the exchange's June 30 deadline.

HQ did not return a phone call requesting comment.

It farms and processes tilapia in Hainan province, an island in the South China Sea.

HQ sells the fish primarily to Chinese distributors, who deliver products to Asia, Europe and North America. One brand name is "Lillian's Healthy Gourmet."

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In 2004, it bought a company in China that makes marine health-care products primarily from tilapia and shark, including nutraceuticals to enrich its tilapia feed formulas.

— Melissa Allison, mallison@seattletimes.com

Condo projects

reborn in Seattle

Two Seattle condo projects that were casualties of the real-estate bust are back on the market, weeks after banks foreclosed on them.

Both properties — the nearly finished Volta condos in Belltown and the still-unbuilt Seneca Towers site on First Hill — could have new owners in a month or two.

An agent for East West Bank has set a May 9 deadline for sealed offers for Volta, an eight-story, 34-unit project at First Avenue and Bell Street. It's about 85 percent complete, according to a listing circular.

The California bank repossessed the building last month after Volta's developers defaulted on a construction loan, according to county records.

East West inherited the loan last year when it took over failed Washington First International Bank, which was undone in large part by bad real-estate investments.

Now, however, "there are a lot of people interested in that property — I'm hearing 30 or more," said James Stroupe, a condo specialist with Realogics Sotheby's International Realty.

A buyer most likely would convert Volta to apartments to take advantage of declining vacancies and rising rents, brokers say.

The building could be ready for leasing in a few months, at a time when demand is surging and few other projects are anywhere near completion.

Volta could always be converted back to condos when that market recovers, brokers add.

It'll be years before Seneca Towers is ready for residents: There's nothing on the site at Eighth Avenue and Seneca Street but detritus from the old buildings that Laconia Development tore down several years ago to make way for construction that never began.

Laconia got city permits in 2007 for two condo towers — one 25 stories, the other nine — with 310 units. It switched the project to apartments in 2008 when the condo market tanked, but by then it may already have been too late.

When lender Lehman Brothers foreclosed on the half-acre site in December, it said Laconia owed $13.5 million in principal and more than $4 million in unpaid interest dating back to June 2008.

This past week Lehman put the property back on the market, asking $11.3 million. Agents Frank Bosl and Jon Hallgrimson of CB Richard Ellis say the zoning has changed since Laconia got its permits, and any owner now could build a taller tower, up to 31 floors.

Bosl said he hopes to have the property sold by early May. There's been a fair amount of interest, he said, a reflection of just how hot the Seattle apartment market seems to be these days.

— Eric Pryne, epryne@seattletimes.com

Another push

in Mastro case

U.S. Bankruptcy Judge Marc Barreca said he wasn't optimistic it would succeed. "Shotgun mediation," he called it.

But this past week he nonetheless ordered representatives of former Seattle real-estate magnate Michael Mastro and his adversaries to meet Monday with a mediator — former King County Superior Court Judge Terrence Carroll — in a last-ditch effort to settle a high-stakes lawsuit.

The case is scheduled to go to trial Tuesday, Barreca said.

Mastro, a longtime Seattle real-estate developer and lender, was pushed into Washington's largest bankruptcy ever in July 2009. He has listed debts totaling more than $570 million.

The lawsuit Carroll will try to help resolve was filed 19 months ago by James Rigby, the court-appointed trustee charged with recovering assets for Mastro's creditors. He's seeking millions from Mastro and others, from assets that Rigby contends Mastro tried to hide as his business's finances deteriorated.

The one-day mediation was proposed by former state Supreme Court Justice Faith Ireland, the guardian appointed to act for Mastro after he suffered a severe head injury in a fall in early February at his Palm Springs home and was incapacitated.

Ireland also agreed Friday to turn over Mastro's medical records since his injury. The trustee's lawyers have questioned whether Mastro remains incapacitated, and suggested secrecy about his condition could be part of a plan to disrupt the trial.

— Eric Pryne, epryne@seattletimes.com

Comments? Send them

to Rami Grunbaum:

rgrunbaum@seattletimes.com

or 206-464-8541.

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