Old but interesting article.
Friday, March 14, 2008
TOUSA's Chapter 11 to focus on intercompany claimsSouth Florida Business Journal - by Paul Brinkmann
Home builder TOUSA's Chapter 11 reorganization is nearing its meeting of creditors, set for 1 p.m., March 19, at the federal courthouse in downtown Fort Lauderdale.
Meanwhile, attorneys representing the debtor are discussing a mid-May date for filing of claims, aside from intercompany claims.
"We'll be hiring an expert to investigate intercompany claims, given the fact that there will be a spotlight on that issue," said Daniel Golden, counsel to the official committee of unsecured creditors.
"I would suspect intercompany claims will be one of the main events," Judge John K. Olson responded.
Golden is from the New York office of Akin Gump Strauss Hauer and Feld. Dozens of attorneys from firms in New York, Connecticut, California and Florida have appeared in the case.
The bankruptcy case promises to be one of the most complex ever seen in South Florida, involving $2.3 billion of assets and almost as much in liabilities.
The case will restructure more than $2 billion in debt obligations, including those related to bank debt, senior and subordinated public bond debt, and complex land bank option and development contracts, according to New York law firm Kirkland & Ellis, which represents the debtor.
Bankruptcy includes 38 debtors
The complexity of the case includes TOUSA's structure, which in the Chapter 11 includes 38 debtors representing brands Engle Homes, Newmark Homes, Harris Estate Homes and Trophy Homes.
TOUSA entered bankruptcy with a plan to obtain debtor-in-possession (DIP) financing from Citigroup Global Markets for up to $150 million.
But some noteholders objected, saying noteholders can prove TOUSA has substantial cash reserves. Some of those objections are still pending.
The objections, filed by Miami-based Genovese, Joblove & Battista, also said the company committed constructive fraudulent conveyance in July, when it "forced" its subsidiaries to grant its first and second lien term loan lenders secured guaranties of $500 million, and to guaranty its $700 million in revolving credit to pay debts related to the Transeastern joint venture.
TOUSA's plan proposes that senior noteholders will receive common stock in a reorganized company, that unsecured claims would receive a pro-rata share of the common stock, and holders of the company's subordinated notes may receive stock warrants and a proportionate share of proceeds generated by a litigation trust, which other holders would also share.
Hollywood-based TOUSA's presence in South Florida includes Engle Homes projects in Cooper City, Doral and Delray Beach.
Attorney Natasha Labovitz, a partner in the restructuring group of Kirkland & Ellis, has been a lead counsel for the debtor.
She recently told Judge Olson that TOUSA has a comprehensive program to communicate with creditors, claimants and buyers involved in the bankruptcy reorganization, including a hotline and updated information on a Web site.
The current online claims register shows the largest single claim - $2.4 million - under Cora Wiltshire, represented by attorney Gregory Grossman of Astigarraga Davis in Miami.
pbrinkmann@bizjournals.com | (954) 949-7562
AI
