Two Main South apartment buildings snarled in legal battle over ownership

WORCESTER — Who owns these Worcester apartment buildings that have been tied up in legal theater for more than 10 years?

A Shrewsbury man, Ara Eresian Jr., says he owns them. Meanwhile, a long list of defendants in a lawsuit claim that’s not the case.

The next court hearing is scheduled in Suffolk Superior Court on Tuesday, Halloween. It’s an apropos date, perhaps, because this legal case has more twists and turns than a band of lost trick-or-treaters, randomly going from street to street to get their candy bearings.

The current lawsuit was brought by a legal entity formed in Wyoming called Blue Sky Holding Group LLC, as trustee and on behalf of Main/Hitchcock Realty Trust. It’s suing seven defendants, claiming it owns the apartment buildings at 1029-1037 Main St. and 1039-1041 Main St., on opposite sides of the Hitchcock Road intersection, with a combined assessed value of $4 million, according to city records.

Melanie Eresian is the legal manager of Blue Sky Holdings. She has the same last name as Ara Eresian, who had a controlling interest in an earlier legal entity formed in Wyoming called Eldorado Canyon Properties LLC.

Roughly 10 years ago, Eldorado claimed it owned the apartments. According to a T&G article from the time, Eresian took rents from tenants but didn’t make mortgage payments, pay any property taxes or pay water and sewer bills. At the time, Eresian said the properties didn’t have a mortgage, so there were no payments to make. A judge subsequently said a mortgage did exist.

After the judge’s ruling, the properties were slated for foreclosure, but Eldorado filed for bankruptcy, stalling the process.

Attempts to reach Melanie and Ara Eresian for comment on the current lawsuit were unsuccessful. A reporter made calls to a listed number for the Eresian family and knocked on several doors in Shrewsbury listed in connection with Melanie and Ara Eresian.

A call to lawyer Neil Kreuzer, who represents Blue Sky, was not returned. Gary Hogan, the lawyer for defendant Landmark Apartments LLC, which also claims to own the properties at the heart of this dispute, declined to comment.

Lawyer Barry Bisson did go on the record. He’s “of counsel” to Landmark Apartments. That means he’s not directly involved in the case but serves as a Landmark lawyer. As Bisson sees it, “(Ara Eresian) is a litigious person. He almost seems to want to hold the properties hostage.”

Bisson said that Eresian forms shell companies and uses them to make baseless legal claims to muck up the legal system in an attempt to control the apartments. The latest attempt, said Bisson, came just before Landmark was to sell the properties. As a result, the buyer backed out because the bank couldn’t extend the loan and interest rate.

“Landmark Apartments was going to sell. It had a buyer, but all of a sudden Eresian submitted a lawsuit, saying he has rights to the property, again,” said Bisson. “He’s playing the same games.”

Basis of Blue Sky's lawsuit: legal technicalities

The mortgage on the apartments has passed from one financial institution to another over the past 10 years.

The crux of Blue Sky’s legal argument is that some of the institutions that subsequently assumed control of the mortgage failed to follow procedural rules for the transfers. Given those developments, none of the institutions owns the apartments, claims Blue Sky, because legal procedures governing the transfer of the mortgage weren’t followed.

For example, Blue Sky highlights the mortgage transfer from the Federal National Mortgage Association, known as Fannie Mae, to J.P. Morgan. It happened in 2013, and the lawsuit claimed the Federal Housing Finance Agency didn’t authorize Fannie Mae to transfer the mortgage.

Also, the transfer wasn’t signed by the finance agency, said Blue Sky. Instead, it was signed by a Fannie Mae official, which didn’t meet legal requirements for a mortgage transfer. As a result, all transfers of the mortgage from 2013 are null and void, the lawsuit claims.

Blue Sky wants a judge to rule the defendants hold no rights, title or interest in the apartments, and that Blue Sky has been the valid owner since 1994. It also wants a full accounting of all income and expenses from September 2013 to the present, a period of time when the mortgage was held by HCP Properties Inc., Salisbury Worcester LLC and Landmark. Any net income calculated should be turned over to Blue Sky, plus any damages determined by the court.

Landmark's position: Blue Sly lawsuit 'frivolous'

Landmark states in court documents that Blue Sky is a shell entity created by Ara Eresian in an attempt to circumvent prior rulings not in his favor issued by prior courts.

Calling Blue Sky’s primary claims “wholly insubstantial, frivolous and not advanced in good faith,” Landmark wants a ruling that covers its attorneys cost and any other expenses.

“Blue Sky is a shell company and the most recently created by Ara Eresian Jr. to prosecute frivolous claims that have been denied by every court that has reviewed them, in his seemingly never-ending quest to own the Subject Property,” reads a Landmark court document.

Landmark's court documents further state that it paid $2.6 million in 2018 from then mortgage holder Salisbury Worcester LLC to assume the mortgage.

Five years later, in June of this year, after learning Landmark had the properties on the market for sale, Blue Sky filed its lawsuit. The basis of the complaint is Blue Sky’s claim the 2013 mortgage transfer from Fannie Mae to J.P. Morgan was legally illegitimate. As a result, subsequent mortgage transfers were invalid.

Also in June, Landmark accepted a $5.7 million offer from Pankaj Sharma to buy the properties. That offer was rescinded when Sharma became aware of Blue Sky’s lawsuit.

“As a result of Blue Sky’s false and malicious allegations that the Trust, not Landmark, is the true owner of the Subject Property, Landmark lost its accepted offer to purchase the Subject Property.”

Landmark also states that Eresian and the trust that he bought a controlling interest in more than 10 years ago lost the properties to foreclosure because the trust didn’t make mortgage payments despite collecting rents. Earlier court proceedings determined the foreclosure was valid.

No stranger to jail

Eresian reportedly was sent to jail twice in January 2013 for failing to pay court-ordered judgments.

In state housing court, Judge Timothy F. Sullivan found Eresian in contempt of court for failing to pay $2,850 in damages to a tenant whom he allegedly locked out of an apartment without a proper eviction proceeding. Eresian was also hit with a $1,000 fine.

Days later, Eresian was arrested in connection with a bankruptcy case in Worcester. U.S. Bankruptcy Court Judge Melvin S. Hoffman issued a warrant for Eresian after he failed to show up for a hearing to explain why he had not paid $6,772 in legal fees to a Shrewsbury couple he targeted in one of his failed lawsuits. Hoffman tacked on another $1,728 in legal fees that Eresian had to pay the couple

In another case, after years of litigation over a Bourne Street property, a Worcester Superior Court judge permanently barred Mr. Eresian from ever again filing any motions or pleadings on the matter.

The judge also took the rare step of requiring Eresian to present a copy of the ruling to the Board of Bar Examiners if he ever passes the bar exam and applies to be licensed as a lawyer in the state. Eresian failed to pass the bar exam five times, according to past T&G coverage.

Bisson, the Landmark lawyer, believes Eresiain is once again resorting to specious means to gain control of Worcester properties.

"This property has been a source of litigation over a decade...Eresian is trying to do the same games."

Contact Henry Schwan at henry.schwan@telegram.com. Follow him on X: @henrytelegram.

This article originally appeared on Telegram & Gazette: Ara Erasian Jr. files lawsuit over two Worcester apartment buildings