Southeast Banking Corporation (fka STBPQ)

[Enterprising Investor]

What is the latest status of the SEBC bankruptcy case? (6/29/12)

Despite the Trustee’s continued efforts to locate a counter-party to a business transaction similar to that embodied in the March 13, 2009 confirmed Chapter 11 plan, or a counter-party to any reasonable business transaction which would benefit SEBC and its stakeholders, no transaction has been proposed by an investor to date. The Trustee has, however, continued to actively market the real estate owned by subsidiaries of the SEBC estate, and on March 27, 2012, the Bankruptcy Court entered an Order authorizing the Trustee to exercise the estate’s interest in one of its subsidiaries to effectuate a sale of certain real estate for a minimum purchase price of $4,200,000. By motion filed on June 18, 2012, the Trustee sought approval of certain modifications to the contract for the sale of this real property. That motion is scheduled for hearing on July 3, 2012. In the event that motion is granted, the Trustee anticipates closing on the sale of the real property by July 20, 2012.

After the real estate sale closes, and in light of the inability to consummate the Chapter 11 Plan, the Trustee intends on moving to convert this case back to a case under Chapter 7 of the Bankruptcy Code in order to liquidate SEBC’s remaining assets. In determining to pursue this course of action, the Trustee has engaged in continuous dialogue with the Confidentiality Parties regarding available options for winding up this case and liquidating SEBC’s remaining assets. After considering several options – including modification to the Chapter 11 Plan under 11 U.S.C. §1127(b) and conversion to Chapter 7 – and discussing those options with the Confidentiality Parties, and in accordance with his business judgment, the Trustee believes that conversion to Chapter 7 is in the best interests of the Estate and its creditors at this time. The Trustee believes that the disposition of the remaining real estate parcels can be accomplished in an orderly fashion after the case is converted to Chapter 7. Because the Trustee believes that the prospect of any form of reorganization is very remote, the administration of the case under Chapter 7 is more appropriate and preserves all possible avenues for realization of value for the SEBC estate.