Bankruptcy Audible: David Tepper’s companies could get drawn into failed Rock Hill HQ project

WILMINGTON, D.E. (WBTV) - No one got everything they wanted during a bankruptcy hearing for David Tepper’s real estate company GT Real Estate Holdings. But the faces of attorneys representing York County, Rock Hill and contractors were less glum than the counsel for GTRE after Judge Karen Owens issued her decision Thursday afternoon.

Owens would not approve a financing plan (called Debtor-In-Possession/DIP) for GTRE to reorganize and pay off creditors through a loan from DT Sports, another Tepper entity. While Owens indicated that she would ultimately approve a plan, she potentially opened the door for the possibility of lawsuits from the various government entities and companies that claim they are owed money.

Attorneys for York County, Rock Hill and contractor Mascaro/Barton Malow (MBM) continued to hammer away at the interconnected nature of Tepper’s business empire over the two-day hearing. Their point is that other Tepper entities, such as the Carolina Panthers, should also be on the hook for money owed by GTRE.

Related: York County responds after Panthers owner David Tepper’s real estate company files for bankruptcy over Rock Hill project

“This is one of the most incestuous cases I’ve been involved with or heard of,” MBM attorney Mike Roeschenthaler said during his closing argument.

Roeschenthaler said every entity involved had the fingerprints of Panther’s owner David Tepper on it.

Court records and testimony showed GTRE was mostly backed by other Tepper entities, with $163.5 million coming from the Carolina Panthers, made out as checks, and another $62.5 million from DT Sports.

Rock Hill claims it’s owed $20 million and York County claims $21 million.

An agreement between GTRE and Rock Hill for $225 million in bonds for the Panthers to move its team headquarters and practice facilities to South Carolina never materialized and the project collapsed.

Related: Owner dodges questions on Eastland, Rock Hill and Uptown District as hints about stadium renovations emerge

Rock Hill’s counsel argued the bankruptcy proceedings should not close the opportunity for lawsuits because he believed they could “pierce the veil” and prove that other Tepper entities also should be liable for the debts.

That could potentially include Appaloosa Management, Tepper’s hedge fund that made him a billionaire.

Roeschenthaler weaved a narrative showing that Panthers COO Mark Hart, and Appaloosa members Mike Palmer and Jim Bolin were orchestrating the operations of GTRE. Another person appointed as an independent manager after the bankruptcy, attorney Lawrence Rolnick, was also connected to Appaloosa, as Roeschenthaler showed during the hearings.

At one point, Roeschenthaler had GTRE’s Chief Restructuring Officer Jonathan Hickman at a loss for words after Hickman said “the larger organization” had been involved in selecting Rolnick. Roeschenthaler pointed out that GTRE had no employees and only four board members and asked what “the larger organization” was to which Hickman paused and responded, “I just don’t know.”

Even with the questions of insider involvement, Judge Ownes and counsel for GTRE said the debtor-in-possession financing plan was generous and fair to creditors.

But how a financing plan would work with a ruling that allows creditors to sue remains to be seen. DT Sports has to approve of the changes in the DIP plan before the two sides start negotiations over the issues brought up by Judge Owens.

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