In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides his analysis on a bankruptcy case involving Riverwalk Jacksonville Development LLC.
Article Link: https://www.jacksonville.com/story/news/2015/07/21/company-owns-11-southbank-acres-releases-bankruptcy-plans/15672428007/
Summary
Riverwalk Jacksonville Development LLC, a Miami-based company, has proposed a bankruptcy reorganization plan that involves selling off some of its Southbank properties to emerge from bankruptcy debt-free. The company, which filed for bankruptcy last year, owns approximately 11 acres of land around the Wyndham Hotel and Convention Center, including the Chart House Restaurant building. The reorganization plan, which requires approval from a judge and a vote from equity holders, details property sales to Brickell South Miami Developments and Alliance Realty Partners. Adam Stein-Sapir, a portfolio manager at Pioneer Funding Group, reviewed the case and noted that the company’s plan appears to be focused on selling property to pay off its claims and retain some smaller land parcels.
- The company plans to sell significant assets, including the building housing the Chart House Restaurant and the International House of Prayer.
- The reorganization plan is designed to allow the company to pay off its debts and potentially maintain some equity.
- The economic recession hindered the company’s development plans, leading to the current bankruptcy situation.
Q&A
What are the implications of a company filing for bankruptcy?
When a company files for bankruptcy, it typically means that it is unable to pay its debts as they come due. The company is seeking protection from creditors while it reorganizes its finances, which can involve restructuring debt, selling assets, or liquidating the company. Creditors are generally prohibited from collecting debts outside the bankruptcy process, and the outcome for creditors can vary widely depending on the specifics of the case and the type of bankruptcy filed.
How does selling bankruptcy claims work?
Selling bankruptcy claims involves a creditor transferring their right to receive a payment from a bankruptcy estate to a third party, often at a discount. This can provide immediate cash to the creditor, who might otherwise have to wait a long time for a potentially uncertain payout from the bankruptcy proceedings. Companies like Pioneer Funding, LLC specialize in buying these claims from creditors.
What should a creditor consider when deciding whether to sell their bankruptcy claim?
A creditor should consider several factors when deciding whether to sell their bankruptcy claim, including:
- The potential recovery amount and timing if they hold onto the claim versus the immediate cash offer from selling the claim.
- The financial stability of the creditor and whether they need immediate cash to continue operations.
- The risks associated with the bankruptcy case, such as the likelihood of a low or no recovery, and the complexity and duration of the bankruptcy proceedings.
For more detailed information on this topic, creditors can refer to resources like Pioneer Funding, LLC’s guide on selling bankruptcy claims.
