DBSI asks court to convert special purpose master lease entity cases to Chapter 7

By Jennifer Lanning Drey

Portland, Ore., June 17 - DBSI, Inc. asked the U.S. Bankruptcy Court for the District of Delaware to convert the Chapter 11 bankruptcy cases of its special purpose master lease entities to Chapter 7, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The entities previously held master lease agreements with tenant-in-common investors under which the special purpose lease companies leased property owned by the investors.

However, DBSI said none of the special purpose lease companies remain party to a master lease.

As a result, the company said there is no reasonable likelihood of rehabilitation of the companies and it is unable to effectuate a plan of liquidation for the entities.

A hearing is scheduled for July 7.

Meridian, Idaho-based DBSI controls a network of real estate entities. The company filed for bankruptcy on Nov. 10, 2008. Its Chapter 11 case number is 08-12687.

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