Grubb and Ellis Co. (fka GRBEQ)

[starbuxsux]

Grubb & Ellis Receives Bankruptcy-Court Approval Of Sale Plan

12:31 PM ET 3/8/12 | Dow Jones By Stephanie Gleason

Of DOW JONES DAILY BANKRUPTCY REVIEW

Grubb & Ellis Co. (GRBEQ) received the bankruptcy court's approval to move forward with the sale of its assets Thursday, after an additional $15 million in cash was added to the lead bid in an amendment that addresses some objections from creditors.

Judge Martin Glenn called the bid procedures "fair, reasonable and appropriate under the circumstances and designed to maximize the recovery on, and realizable value of, the debtors' assets," according to documents filed with the U.S. Bankruptcy Court in Manhattan.

Grubb & Ellis filed for Chapter 11 bankruptcy in February with an offer from BGC Partners Inc. (BGCP) to forgive the $30 million it was owed in exchange for Grubb & Ellis's assets. BGC Partners agreed also to provide bankruptcy financing so Grubb & Ellis could continue operating during the case.

However, the offer approved in Glenn's order includes an additional $15 million in cash, a change that appears to address creditors' frustrations about receiving no recovery from an offer that was strictly credit. In addition, the $1.1 million breakup fee, which BGC Partners would have been entitled to if it had been outbid at auction and which creditors said was too high, was amended to $330,000 plus $300,000 in expense reimbursement.

BGC Partners' bid will kick off a March 21 auction if other bidders emerge. A

Grubb & Ellis Agrees To Sell Assets To BGC Partners

hearing approving the sale of Grubb & Ellis's assets is scheduled for March 22.

The court's approval comes after Grubb & Ellis said it would be forced to liquidate if it didn't receive court permission for the procedures.

"The choice before the court is stark: approve the bidding procedures proposed by the debtors ... or delay entry of the proposed order and risk the highly likely liquidation of the debtors in the near term," Grubb & Ellis had said, adding that liquidation would result in the loss of 3,000 jobs.

Grubb & Ellis was responding to objections filed by creditors in the case who argued that the sale procedures locked in BGC Partners' bid, which would have provided them no recovery. But BGC Partners' offer came after a year of Grubb & Ellis's efforts to market itself to 50 companies and remains the only offer, it said, and "absent BGC's efforts and capital the debtors would likely have already been forced to liquidate."

The Santa Ana, Calif., commercial real estate and property management company claimed $150 million in assets and $167 million in liabilities in its Feb. 20 bankruptcy filing. The company was recently suspended from the New York Stock Exchange and is awaiting a formal delisting hearing.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

-By Stephanie Gleason, Dow Jones Daily Bankruptcy Review; 202-862-1347; [e-mail]

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03-08-12 1231ET

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