Madison 92nd Street co-manager files plan based on sale and lawsuits

By Caroline Salls

Pittsburgh, Dec. 15 - Madison 92nd Street Associates, LLC co-manager Robert Gladstone filed a plan of reorganization and related disclosure statement for the company's bankruptcy case on Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

According to the disclosure statement, the cornerstone of the plan is the sale of the company's hotel and pursuit of causes of action.

Gladstone said in the disclosure statement that hotel manager Courtyard Marriott Corp. might attempt to assess a large rejection claim.

The rejection claim should be below $500,000, Gladstone said, and Courtyard Marriott and affiliates will owe Madison 92nd damages resulting from malfeasance.

If the court approves a larger-than-expected rejection claim, Gladstone said the plan can still be confirmed because the net hotel sale proceeds will be distributed to creditors in order of priority.

Treatment of creditors will include the following:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of General Electric Capital Corp. secured claims will receive payment on a reduced claim in cash plus interest;

• Holders of general unsecured claims and other unsecured claims will receive a share of net excess sale proceeds and causes of action after payment of administrative, priority tax and priority non-tax claims and the reduced GECC allowed secured claim.

To the extent all senior creditors are paid in full and there is enough cash on hand, unsecured creditors will be entitled to post-bankruptcy interest at the federal judgment rate; and

• Holders of equity interests will receive a share of net excess sale proceeds and causes of action after all other claims are paid in full.

Madison 92nd Street is a New York-based hotel owner. The company filed for bankruptcy on Aug. 16, and the Chapter 11 case number is 11-13917.

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