Competition Continues For General Growth Properties
Post from the Wall Street Journal regarding the General Growth bankruptcy:
“The takeover battle for mall owner General Growth Properties Inc. reached a boiling point Wednesday as General Growth unveiled a deal with Canadian property investor Brookfield Asset Management Inc. even as Australian mall owner Westfield Group considered entering the fray.
Westfield, which owns 119 malls in the U.S., Australia and Britain, signed a nondisclosure agreement this week to begin discussions with General Growth about a possible offer, people familiar with the matter said.
Westfield has $8 billion of borrowing capacity on hand, and is thus far acting alone, these people said.
As Westfield deliberated, General Growth laid out a plan …”
General Growth Properties owns Galleria at Tyler in Riverside, Moreno Valley Mall, and Redlands Mall in the Inland area. A bankruptcy judge will consider all options for the hearing set for March 3.
Follow news about General Growth Properties at the Curtis Law Group Bankruptcy Blog.
Bankruptcy For Riverside Golf Club Closes Down Establishment Beloved By Locals
Chapter 11 Bankruptcy has led a beloved local Golf Club in Riverside to close it’s doors.
From the Press-Enterprise, online:
“The Riverside Golf Club closed for good Wednesday, still owing the city more than $300,000 and holding thousands more belonging to a couple who had poured their life savings into a wedding they had planned there for Saturday.
The closure of the club, at least a half-century old, also sent other patrons scrambling to find alternate links to play and conference rooms to meet in.
Howsmith Corporation, which leases the property from Riverside Public Utilities, has been in arrears since November 2006 and owes $334,000, said City Councilman Mike Gardner, whose Ward 1 includes the club. “I’m surprised,” he said. “I had no idea this was coming.”
Howsmith filed for Chapter 11 bankruptcy Aug. 14, according to the bankruptcy document. A Web site lists Jacklyn Smith as the president of the Riverside company founded in 1979. No one answered at the phone number listed at the same address as the Riverside Golf Club.
Wednesday, John Lee Brown and Dimitra Kelly stood outside the locked gates of the parking lot of the shuttered clubhouse and banquet hall at 1011 N. Orange St.
They’d invited 100 guests to their wedding Saturday.
“This is a tragedy,” said Kelly, 40, who said they’d sunk $8,000 into the kaput celebration. “We had our rehearsal dinner there last Friday. They just faxed me the seating arrangement yesterday.”
Christopher R. Barclay, a trustee for Howsmith Corporation, was on the premises Wednesday. He refused to comment and ordered a reporter to leave. Rancho Cucamonga-based Dennis Baranowski, the corporation’s attorney, could not be reached.
“It’s a shame it’s closing,” said Jerry Seinturier, 56, who remembers the golf course from the 1950s. He plays in the golf league at Bourns Inc. where he works, but learned Wednesday morning that their evening round and banquet had been canceled. The greens had withered to browns over the past two years, he said, but the price was right: $10 for walkers, $15 for riders. “I have no idea where we’ll play now,” Seinturier said.
That leaves only one other 18-hole municipal golf course in Riverside, Sky Links at Van Buren Boulevard. The other city-owned course, at Fairmount Park, is nine holes.
Ken Truelock was shocked to learn that the golf clubhouse was closed for Wednesday’s noon meeting of the Magnolia Center Exchange Club, a service group. “We had a board meeting here yesterday,” he said. “I’m disappointed.”
But Kelly and Brown, who’ve been together eight years and have four children, were crushed. They paid the $837 balance several days ago on the $3,000 owed for the rental hall and appetizers.
Plus, they’ve shelled out another $5,000 for the disc jockey, photographer, flowers, minister, decorations, wedding gown, tuxedo and bridesmaids’ jewelry.
Kelly and Brown said Barclay told them to file a claim.
“We’re depleted,” said Kelly, tears running down her cheeks. “I’m extremely upset and embarrassed. We’ve got all this out-of-state family coming.”
Bankruptcy Filed By “Erin Brockovich” Law Firm
Bankruptcy filings are never glamorous, but sometimes those involved have themselves spent time in the spotlight for prior events or accomplishments of note. One such entity is the law firm featured in the Julia Roberts film, “Erin Brockovich.” From the WSJ blog:
“The personal injury law firm that handled the water contamination case featured in the movie, Masry & Vitotoe, earlier this month filed for bankruptcy protection.
According to Lisa Cohen, a spokeswoman for the firm, based in Westlake Village, Calif., the filing was the unfortunate result of a squabble for funds after the death of founding partner Edward Masry in 2005 (played in the movie by Albert Finney).
According to a report in the Dow Jones Daily Bankruptcy Review, a number of litigants had come forward alleging that Masry promised them assets and cash from the firm. His own estate and heirs also filed claims. All told, the law firm spent more than $3 million related to the claims and ensuing litigation.”
Most Chapter 7 Bankruptcy Filing Cities in Inland Empire, June 2009
For bankruptcy attorneys in Riverside and San Bernardino counties, there was no shortage of Chapter 7 bankruptcies to be filed in June, 2009. And for the second month in a row, the top ten cities in the Inland Empire with the most Chapter 7 bankruptcy filings has remained the same.
The ten cities with the most Chapter 7 bankruptcy filings in the Inland Empire for the month of June 2009 were: Corona, Fontana, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville. Other Inland Empire cities that also had a high number include: Hemet, Hesperia, Lake Elsinore, and Rialto.
Homebuilder’s Bankruptcy Leaves Empty Lots in Riverside County
From the North County Times online:
“The bankruptcy of a major regional homebuilder has left two large tracts in Southwest Riverside County with hundreds of empty lots, prompted a lender to foreclose on one and a homeowners association to demand $2 million in compensation.
John Laing Homes, of Irvine, built a links-style golf course near Lake Elsinore’s baseball stadium and said as recently as March 2008 that it planned 1,500 homes at the neighboring Summerly development. Laing also built several dozen houses at the Holiday senior community in Menifee, with plans to extend the development to nearly 200 homes.
But construction has remained stalled amid weak real estate markets.
The builder filed a Chapter 11 bankruptcy petition in February, seeking temporary relief from debt estimated between $500 million and $1 billion. The Delaware judge handling the case ordered the company liquidated in early June after concluding that the company lacked the assets to cover that debt and re-emerge successfully, according to court records. Messages left with the trustee were not returned.
A lender appears to be foreclosing on parts of the Summerly development. Lawns at a half-dozen model homes are overgrown with weeds, and notices recently posted on the houses indicate a foreclosure auction is scheduled in mid-July, a neighbor said.
Residents of the Holiday development and the 4S Ranch development in San Diego’s Ranch Bernardo neighborhood have filed claims against the builder’s bankruptcy estate.”
For more bankruptcy news, visit Curtis Law Group
Bankruptcy Protection for Eddie Bauer Holdings, Inc.
From CNN online:
“Eddie Bauer Holdings Inc. filed for Chapter 11 bankruptcy protection Wednesday, citing an inability to pay back debt.
Eddie Bauer (EBHI) emerged from Chapter 11 bankruptcy in 2005 after being spun off from former owner Spiegel Catalog, which itself sought bankruptcy protection in 2003.
Costs from the 2005 reorganization, combined with pressure from the current recession, left the company ‘with no choice but to use this process to reduce the debt load,/ said chief executive Neil Fiske in a prepared statement.’”
Eddie Bauer has 371 stores nationwide. In San Bernardino County, there is an Eddie Bauer store in Rancho Cucamonga at Victoria Gardens. In Riverside County, the Dos Lagos Center in Corona also has an Eddie Bauer store. It seems that no closings are imminent, but if a new buyer takes over, however, it’s unclear what effect that would have on store closings.
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Riverside County Bankruptcy for Valley Health System
Bankruptcy looks like it has struck another organization in Riverside County, this time in the health care industry.
Members of the Valley Health System board of directors on Monday tried to assure employees and constituents that the district is headed in the right direction, despite losses of nearly $3 million since the end of last year.
The board met for its first meeting since the health care district, which includes two hospitals, announced the reassignment of Hugh King, its chief financial officer and administrator at Hemet Valley Medical Center.
The district’s other hospital is Menifee Valley Medical Center.
King’s departure comes as the health care district, which declared bankruptcy in December 2007, fails to meet financial projections, according to records.
The district was projected to earn almost $2.1 million between December and February.
Congress Set to Vote on Bankruptcy Bill Today
Congress is scheduled to vote today on altering the Bankruptcy code to allow judges to modify mortgages. This vote about a potential change in bankruptcy law has Riverside County and San Bernardino County bankruptcy attorneys and their bankruptcy clients watching attentively. From the McClatchy Tribune Wire Service:
“The U.S. House is expected to vote today on a proposal that would allow judges to modify mortgages of people who file for bankruptcy — and could bring a new wave of filings, local court officials say.
The proposed “cramdown” legislation has been controversial — lenders, for one, have opposed it. But bankruptcy attorneys and credit counselors say it could be a smart solution, helping struggling homeowners and making sure lenders get at least a portion of their money back.
It’s part of a broader $75 billion housing plan, which President Obama’s team outlined Wednesday. The plan features cash incentives for mortgage holders who cut deals with borrowers for new, more affordable terms.
The bankruptcy provision is expected to go to the Senate soon after the House vote, and rules there will make passage more difficult.
Under current laws, bankruptcy judges lack the authority to modify most mortgages. They can approve modifications for credit-card debt and other loans, including second-home mortgages. In Chapter 12 cases, usually filed to save family farms, mortgages can be adjusted to reflect the current value of a debtor’s home and farm, rather than the original loan amount.
The bill would allow bankruptcy judges to alter the terms of a mortgage, a process known to the industry as ‘cramdown,’ if no other options remain for homeowners. Judges could extend the payment period or lower the value of the mortgage on the home to the existing market value.”
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Obama’s New Housing Plan Doesn’t Address Bankruptcy Law
Although President Obama’s new housing plan may be “loaded with incentives for homeowners, mortgage servicers, lenders and banks” to modify the loans that are leading so many Riverside County residents to foreclosure and bankruptcy, what the plan does not do is address the so-called “cramdown” proposal — that Bankruptcy judges be allowed to modify home loans. This change in bankruptcy law would be a boon for the clients of Riverside County bankruptcy attorneys; it would help many Chapter 7 bankruptcy clients keep their homes. This is not only an issue for homes in Riverside and San Bernardino County areas like Corona and Chino, but also in higher income areas like Rancho Cucamonga, where homes with high mortgage payments have been forcing even high income earners into seeking a bankruptcy attorney or leading to foreclosure. The best that can be said about this housing plan, at least with regard to bankruptcy law, is that it does not “rule out” the possibility that a future bill might tackle this issue.
Riverside County has been waiting for such a bill for a long time and it looks like the wait shall continue…
Going Down? Elevator Music Company Files for Bankruptcy
This is one bankruptcy that Riverside County residents may be ambivalent about, depending on their taste in music. Musak, whose music fills elevators and “on hold” messages for phone systems, is filing for Chapter 11 bankruptcy. Apparently, the global economic crisis that has led many Riverside County residents to seek a bankruptcy attorney is not the culprit this time. Musak’s CEO said that debt from a decade ago is the true source of their need to file for bankruptcy protection.
From CNN online:
“Muzak, the company that put pop, string-filled arrangements of rock songs in your elevator, filed bankruptcy papers Tuesday after it missed a $105 million payment to creditors.
The pipeline of easy listening will continue to flow as Muzak restructures its debt during the Chapter 11 process, the company said.
“Muzak is a solid business with an outstanding customer base, but we are burdened with substantial debt obligations established over a decade ago,” Muzak CEO Stephen Villa said.
Muzak’s cash flows doubled in the last three years, Villa said, “demonstrating that our business continues to perform well even in today’s challenging environment.”
Along with its ubiquitous elevator offerings, Muzak and its 14 affiliates — all privately owned — produce on-hold messages and install sound systems, digital signs and drive-thru systems for retail businesses.
Bankruptcy documents showed Muzak owes its largest creditor — U.S. Bank, as indentured trustee — about $370 million, nearly all of it due this year.
Muzak spokeswoman Meaghan Repko said the filing was voluntary and in cooperation with the creditors.
The weakened global economy was not a factor, she said, noting the company’s profits have been rising in recent years.
The Chapter 11 protections will allow Muzak time to restructure the debt, which was incurred a decade ago, she said.”
Riverside County, with cities such as Corona and Riverside that abound with commercial buildings and offices, has many elevators and phones that have been using Musak for years.
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