Security National Properties' disclosure opposed by Bank of America

By Jim Witters

Wilmington, Del., Oct. 11 - Security National Properties Funding III, LLC's amended disclosure statement for its joint Chapter 11 plan of reorganization drew an objection from Bank of America, NA, according to documents filed Oct. 11 with the U.S. Bankruptcy Court for the District of Delaware.

Bank of America, the company's pre-bankruptcy loan agent, says the disclosure statement devotes less than half a page to discussion of the debtors' assets and devotes "no space at all" to the debtors' business operations.

"Since the ability of the debtors to perform their proposed obligations under the amended plan is dependent on the operation of a portfolio of real estate assets, a detailed discussion of past, current and future performance, including a sensitivity analysis and source and uses of cash, should be included," the objection states.

Bank of America raised objections in May that resulted in mediation sessions with Security National's advisers and principals and its plan of reorganization sponsor.

The bank says the Security National disclosure statement focuses "almost entirely (a full five pages) on their one-sided and inaccurate view of the course of negotiations between the debtors and Bank of America both before and after these bankruptcy cases."

Discussion of the settlement negotiations and the court-ordered mediation by Security National "violates both the federal rules of evidence and the local rules of this court," the filing states.

Bank of America is asking the court to deny approval of the disclosure statement and strike the portions of the statement "that represent little more than an unwarranted smear campaign."

In the alternative, the bank asked that its response to the Security National allegations be included in the amended disclosure statement.

A hearing to consider the adequacy of the disclosure statement is scheduled for Oct. 15.

Security National Properties Funding III is a Baton Rouge, La., affiliate of real estate investment company Security National Master Holding Co. It filed for bankruptcy on Oct. 13, 2011 under Chapter 11 case number 11-13277.

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