Bank of America has filed a lawsuit to foreclose on a $26.5 million loan that was to provide a rescue line for Regency Homes prior to its collapse in 2008.

The lawsuit, which was filed in May in Polk County District Court, seeks to foreclose on 20 properties that were used to secure the loan, which initially was written by JPMorgan Chase & Co. in December 2007. NAI Ruhl & Ruhl Commercial Co. was appointed receiver of the properties in late June.

Many of the properties have been listed for lease or sale by Ruhl, which took over marketing duties after the collapse of another Regency-related company, Executive Real Estate Services. That company was operated by Robert Myers, son of the late Michael Myers, who co-founded Regency.

Robert Myers has moved to England and turned over power of attorney for his real estate dealings to a former office manager.

The Myers family is not listed as a defendant in the lawsuit. When Regency principals sought the JPMorgan loan in 2007, they formed a real estate holding company called Regency Capital Fund I LLC and transferred deeds to the properties into the fund.

Properties in Dallas, Muscatine, Polk, Pottawattamie and Story counties in Iowa were used to secure the loan, along with commercial real estate in Nebraska and Utah.

Among Regency’s varied real estate activities was the purchase of, development of or investment in commercial real estate, including strip malls and warehouses, that were managed to provide funds to the company and the Myers family.

Bank of America acquired the loan after its purchase of LaSalle Bank, which acted as trustee of a JPMorgan commercial real estate trust. A portion of the loan also was assigned to Delaware-based Mezz Cap Finance LLC, which is a co-plaintiff in the lawsuit.

As of April 1, Regency Capital Fund owed slightly more than $25 million on the loan.

The loan was among many efforts Regency principals made to save the company from collapse as real estate markets collapsed, its land holdings grew and credit lines disappeared.

Among the properties included in the lawsuit is 1422 Scott Ave., former home of Environmental Reclamation & Recycling LLC, where Regency attempted to launch a construction-waste recycling business. That business tumbled last year along with its parent company.

The Iowa Department of Natural Resources (DNR) has claimed a $100,000 bond posted by Environmental Reclamation & Recycling and will use the money to clean up material that could be tainted with asbestos.

As with many Regency companies, the recycling business has been the target of multiple lawsuits filed by a bank and former business partner. In addition, the DNR has waged a 2 1/2-year battle to remove a pile of construction waste from a site along Interstate 80 in Bondurant and a yearlong effort to clear material from the shuttered Scott Avenue site.

The $100,000 bond was backed by Bankers Trust Co. and surrendered in February after James Myers, acting as the head of Environmental Reclamation & Recycling, failed to act on a pledge to clear construction waste inside and outside the Scott Avenue building, as well as a site where additional material was dumped.

In addition, the company has faced administrative penalties of $1,000 a month since November because it has failed to comply with a separate agreement with the DNR to remove 65,000 cubic yards of debris that was shipped from its recycling center to Bondurant.

Those fines totaled $9,000 as of July 1. The Iowa attorney general’s office will initiate legal proceedings against the company when the fines total $10,000, as they are expected to do next month.

A DNR air-quality specialist has found asbestos in the material at the Bondurant site. The DNR is requiring companies that bid on the Scott Avenue cleanup to be certified in asbestos removal, although the toxic substance has not been found at that location.

“We decided it was better to err on the side of caution,” said Chad Stobbe, senior environmental specialist with the DNR’s land quality bureau.

The DNR does not know for certain the quantity of material at the recycling center. However, one contractor who bid on the job estimated that 6,000 tons of debris was left when Environmental Reclamation & Recycling abandoned its building, Stobbe said.

Stobbe said a contractor was not chosen in a bidding round that closed June 19. The DNR is deciding whether to launch another round of bids or request additional information from contractors.

In April, U.S. Rep. Leonard Boswell asked the U.S. Environmental Protection Agency (EPA) to visit the Bondurant dump site and determine whether any federal funds were available for its cleanup. The agency responded that it did not believe the site presented an “imminent and substantial endangerment to human health and the environment.”

However, that assessment was made prior to a site visit later in April by an EPA representative. The results of that visit were not available by press time.

Boswell also has requested a $3 million earmark for a test project involving Metro Waste Authority, state and federal environmental authorities and a Greater Des Moines engineering company to treat material from the Bondurant site.

The costs of clearing the debris in Bondurant and transporting to the Metro Waste landfill in eastern Polk County have been estimated at more than $1 million.