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Specializing in insolvency and complex commercial matters since 1974

Bankruptcy Court Confirms Chapter 11 Plan Of Reorganization In Arlington Ridge Cases

On March 12, 2009, the United States Bankruptcy Court for the Middle District of Florida entered an Order Confirming Debtors’ Amended Joint Plan of Reorganization. The four related Debtors were the owners and developers of a planned unit development consisting of approximately 492 acres of real property in Lake County, Florida, which was established as an active adult community. The Debtors initially proposed a five year plan providing for the continued development of Arlington Ridge and the payment of the largest secured creditor and all other non-insider creditors in full. Funding for this plan was to be funded by insiders, who were also guarantors of the secured bank debt. The insiders were willing to waive immediate payment of approximately $800,000 of post-petition financing and to fund the plan on the condition that they not be sued on their guarantee. Less than ten days after the Debtors filed their 100% plan, the secured creditor sued one of the guarantors, causing the Debtors to be in default on their “soft cost” DIP loan and requiring abandonment of their initial plan of reorganization. The Debtors’ amended plan of reorganization, which was confirmed by the Bankruptcy Court over the objection of the principal secured creditor, provided for the wind-down of the Debtors’ business operations and for the transition of those business operations and the transfer of most of the Debtors’ real estate and any related permits and entitlements to the secured creditor. Pursuant to the Confirmation Order, the Debtors have transferred most of their real estate and related assets to the secured creditor in full satisfaction of its Secured Claims. Harley E. Riedel and Amy Denton Harris led the firm’s representation in these cases.