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7677 East Berry defaults on forbearance accord; DIP loan terminated
By Caroline Salls
Pittsburgh, Sept. 15 - 7677 East Berry Avenue Associates, LP is in default on its debtor-in-possession facility forbearance agreement because the DIP loan agent does not think the company can confirm a plan of reorganization that is acceptable to the agent, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Colorado.
Agent Hypo Real Estate Capital Corp. said its decision was based on chief restructuring officer Andrew S. Miller's examination of the company's affairs.
The company filed a plan of reorganization in July, but said earlier this month that it would not seek approval of the disclosure statement at a hearing scheduled for Sept. 9.
7677 East Berry said at that time that it was not withdrawing its proposed plan or disclosure statement.
As a result of the forbearance default, the agent has terminated the $30 million DIP facility. The company has been instructed to immediately stop using DIP loan-related cash collateral.
Hypo said the automatic stay imposed by 7677 East Berry's bankruptcy filing will terminate in five days, giving the agent the right to exercise all of its rights, including launching state court foreclosure procedures on the collateral.
The lenders are also no longer obligated to make advances to the company.
As previously reported, the forbearance was granted in connection with 7677 East Berry's failure to make outstanding unit required release payments.
7677 East Berry, Everest Holdings, LLC and EDC Denver I, LLC are the owners of the Landmark Residential Condominium tower in Denver. The companies filed for bankruptcy on Aug. 28, 2009. The Chapter 11 case number is 09-28000.
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