TAHOE CITY, Calif. –  After months of uncertainty amid foreclosure proceedings, owners of the Boatworks Mall have announced they have started bankruptcy proceedings to prevent foreclosure.

After foreclosure proceedings began in January, The Boatworks Mall was scheduled for public auction on Aug. 12 at 10:30 a.m.

Just the day before the auction, on August 11, Boatworks at Tahoe LLC commenced a reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of California.

Boatworks at Tahoe LLC, which owns and operates the Boatworks Mall and the Inn at Boatworks, announced that it will remain open while it seeks court approval of a reorganization plan. 

“Staying open is crucial for the business, the employees, and the community,” said Marie Murphy, CEO of MJD Capital Partners, who owns Boatworks at Tahoe LLC. “A Chapter 11 reorganization of the LLC that owns this iconic project legally prevents foreclosure while the business restructures.” 

The notice of sale had listed the unpaid loan balance and other charges at over $15.5 million.

MJD Capital Partners were, and now appear to continue, planning to redevelop the mall.

“We continue to believe a mixed-use redevelopment is the best way to revitalize Boatworks and preserve its unique character,” said Murphy. “Foreclosure would be a major blow to the area. For over four decades, Boatworks has been Tahoe City’s place to be. With this reorganization, we intend to continue our efforts to ensure that that legacy continues.” 

Mixed-use plans include hotel lodging, a spa, residential condominiums, and independent commercial spaces.