The main creditor in the Chapter 11 bankruptcy reorganization involving the 30-story Regions Center in downtown Little Rock has accused the building’s owners of dragging their feet.
The owners’ bankruptcy has been pending for six months, yet “Debtors have made no progress toward a reorganization,” Wells Fargo Bank, a trustee for a pool of investors who made the loan to the building owners in 2006 to buy the property, said in a recent bankruptcy filing.
(The investors have a massive legal name: the Registered Holders of COMM 2006-C8 Commercial Mortgage Pass-Through Certificates.)
The 32 LLCs with an ownership interest in the 547,000-SF building have asked a U.S. Bankruptcy Court judge in Delaware for more time to file their plan of reorganization. Wells Fargo, though, wants the request denied. Or if it is approved, the time frame should be short, Wells Fargo said.
The reorganization plan was due on April 8, but at the end of March, the owners asked for an extension until July 7.
The owners said they were “proceeding in good faith in negotiating a process for reorganizing,” according to the March 31 filing.
The owners said in the filing that they were in talks “with numerous replacement lenders and anticipate being able to file a plan of reorganization in the very near future which provides for a 100 percent recovery to all of the Debtors creditors, including unsecured creditors,” the owners said.
Wells Fargo said the creditors won’t take “anything less than the full amount owed under” the loan documents.
Last year, the 32 LLCs with an ownership interest in the building allegedly defaulted on the $32 million loan used to buy the property. The owners owed $29.6 million, according to Wells Fargo.
In December, the owners filed for Chapter 11. The total debt is listed at $30.4 million, according to bankruptcy documents. The building, the owners said, is appraised at $40.5 million.
A judge hasn’t ruled on the request for an extension to file the reorganization plan.
The Regions Center reported revenue of $1.55 million for the first three months of the year and a net income of $360,000, according to the latest operating report filed in April.