South Broadway theater owner goes bankrupt to avoid foreclosure

Theater Owner Files for Bankruptcy to Stall Foreclosure

The owner of a recently renovated theater on South Broadway in Denver has taken the step of filing for bankruptcy in order to halt a lender’s foreclosure proceedings.

Sonquist LLC, managed by real estate attorney Doug Norberg and business partner Paul Yaft, submitted for Chapter 11 protection on Friday citing the need for an automatic stay to protect their assets from imminent foreclosure.

After purchasing the former Jewel Theater in December 2018 for $1.6 million, Norberg and Yaft invested heavily in restoring the historic building back to its former glory. However, financial difficulties arose when they took out a $2.3 million loan from Bank of Denver in September 2022, which was later acquired by MidWestOne. Despite requesting a payment deferment to fund essential renovations like installing a sprinkler system, the bank declined and initiated foreclosure proceedings in mid-August.

In an effort to secure a new loan and avoid foreclosure, Norberg stated that the true value of the theater exceeded $6 million and that the lender’s collateral was adequately secured.

Representing the business in the bankruptcy process, Norberg is working with attorney Timothy Shea of Robinson, Waters & O’Dorisio who is representing the lender.

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