Tepper’s GT Real Estate offers $82 million to pay off Rock Hill bankruptcy
An additional $20 million could head to the City of Rock Hill after the sale of the property. The plan was filed in Delaware bankruptcy court today and still has to be approved.
CHARLOTTE, N.C. (WBTV) - David Tepper’s GT Real Estate has announced a new plan to pay everyone in the bakruptcy case of the failed Carolina Panthers headquarters project in Rock Hill.
The announcement from GT Real Estate came on the eve of a court hearing to determine whether GT Real Estate should have to produce records, interviews and provide more transparency of the finances of the company and the project.
In a news release, GT Real Estate said the new reorganization plan would make $82 million available to pay off claims from contractors and York County. Another $20 million or more would be set aside for Rock Hill from the proceeds of the sale of the property.
The plan was filed in Delaware bankruptcy court today and still has to be approved. The funding would come from DT Sports Holding, LLC.
Oiriginally, GT Real Estate proposed a $20 million Debtor In Possession Financing plan that creditors strongly argued against.
Here’s how GT Real Estate described the Plan of Reorganization.
• $60.5 million in cash funded into a settlement trust for the benefit of contractors, subcontractors and general unsecured creditors, which GTRE believes will be sufficient to pay all allowed claims in full;
• $21.165 million in cash to reimburse York County for all amounts it contributed to the project, plus interest; and
• $20.0 million or more from the available net proceeds (after clean-up and senior claims) of the sale of real property to make payments to the City of Rock Hill.
A source told WBTV that cleanup of the Rock Hill site could cost upwards of $15 million but Tepper’s companies would absorb the cost. The property could either be sold to a third part or the City of Rock Hill.
A spokesperson for GT Real Estate wrote that the company believes the plan “is in the best interest of its creditors” and they anticipate a hearing to determine whether it will be approved in October. Sources tell WBTV the $60.5 million piece of the pie should be enough to cover the vast majority of claims from the contractor, Mascaro/Barton Malow, and subcontractors.
“This Plan reflects GTRE’s promise to expeditiously resolve all claims and make payments to its creditors, including to York County and the City of Rock Hill. GTRE now has a clear path to emerge from bankruptcy made possible by substantial commitments from DT Sports Holding, which has made available to GTRE more than $82 million in cash in an effort to bring this process to an orderly and equitable conclusion,” a spokesperson for GT Real Estate wrote.
A spokesperson for the City of Rock Hill said they had no comment on the new development. WBTV is still waiting for an official response from York County. A source told WBTV that the new plan was ironed out with the knowledge of the creditors and the filing won’t come us a surprise.
Attorney Mike Roeschenthaler represeting contractor Mascaro/Barton Malow said he hopes the new plan moves the bankruptcy case toward a less contentious ending.
“We believe the plan demonstrates a good faith effort by the debtor,” Roeschenthaler said. “Progress has been made and we look forward to bringing the case to a successful close.”
The new reorganization and financing plan was filed one day before a scheduled hearing that could open the books of GT Real Estate and some of Tepper’s other companies.
The City of Rock Hill filed a motion called a Bankruptcy Rule 2004 that is essentially “a broad investigation into the financial affairs of the debtor for the purpose of the discovery of assets of the estate and the discovery of fraudulent conduct.”
If granted, it would force GT Real Estate to take part in depositions and produce responsive documents.
It is not clear yet whether the city will move forward with the motion during the hearing or withdraw it.
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