Norwich — A U.S. Bankruptcy Court judge ruled Tuesday that the former developer of the nearly 50-acre former Norwich Hospital property in Norwich cannot include the property in his personal bankruptcy case.

The ruling should clear the way for new owner Castanho Development LLC to market and develop the property that borders the much larger Preston portion of the former Norwich Hospital.

In an 11-page, strongly worded ruling, Judge James Tancredi wrote that Mark Fields, principal in Thames River Landing LLC, could not include the property, owned and mortgaged by the LLC, in his personal Chapter 7 bankruptcy filing.

Castanho successfully foreclosed on the $450,000 mortgage it had provided to Thames River Landing and took ownership of the property June 19. A day earlier, Fields had filed Chapter 7 bankruptcy in Hartford and a bankruptcy trustee attorney sought to include the property in Fields’ assets, citing its value and two proposed purchase agreements from outside parties.

But Tancredi said Fields did not file bankruptcy on behalf of the LLC, but rather for himself.

“The debtor wants to have his cake and eat it too,” Tancredi wrote. “After devouring the entire cake, he now would like the trustee to serve him another slice. ... The debtor does not now get to both protect himself and other LLC members from claimed losses as an individual and also act as the LLC entity. If the debtor wanted to protect the property before title vested with Castanho, he could have done so in the foreclosure action or sought bankruptcy relief for TRL. He has not done so here.”

Tancredi also waived the 14-day waiting period for his ruling “in the interests of justice and fundamental fairness,” he wrote, "so as to avoid any prejudice in delaying Castanho, or its assigns, from enforcing its judgement and secure its title and possession.”

Fields, who renovated and moved into a house on the former Norwich Hospital property, could not be reached for comment Tuesday evening. The ruling cleared the way for Castanho to remove Fields “by ejectment or summary process during the pending bankruptcy proceeding,” Tancredi wrote.

Carl Castanho of Castanho Development said Tuesday he anticipated the court would rule in his favor but declined to comment immediately on his plans for the property.

Norwich city officials said they look forward to working with Castanho to develop the long-neglected, 49.65-acre property, listed on city tax records as 626 and 705 Laurel Hill Road and two tracts with no numerical addresses.

Mayor Peter Nystrom and Norwich Community Development Corp. President Robert Mills met for two hours with Castanho in July and talked about potential plans. Nystrom said Tuesday the developer was interested in learning the city’s desires — and what the city doesn't want there.

Nystrom said the development on the Norwich side must complement the proposed $400 million to $600 million development by Mohegan Gaming & Development on the 393-acre former Norwich Hospital in Preston.

“This development has to be complementary and augment what is happening over there,” Nystrom said.

While Preston is in the final stage of cleanup on its portion of the sprawling former mental illness hospital, the buildings on the Norwich side remain abandoned and decaying, the grounds overgrown and unsecured, except for the house Fields renovated and occupies.

“We’re pleased that the ruling was given, and we look forward to speaking with the Castanho group about making a more positive mark in southeastern Connecticut,” Preston Redevelopment Agency Chairman Sean Nugent said.

c.bessette@theday.com