Alterra lenders GMAC and Bank One change votes to accept reorganization plan

By Carlise Newman

Chicago, Nov. 5 - Alterra HealthCare Corp. lenders GMAC Commercial Mortgage and Bank One have filed motions in court permitting them to change votes on Alterra's reorganization plan from rejection to acceptance.

GMAC said it rejected the plan based on its initial understanding of the disclosure statement and preliminary discussions with the company.

However, following the submission of its "no" vote, discussions with Alterra resulted in a change in the waiver and amendment forwarded to GMAC on Oct. 29. It now sets forth the conditions of the GMAC claim in the merger agreement that will be required to close the transactions considered in the plan.

Due to the change, GMAC has told the bankruptcy court that it wishes to accept the plan.

Bank One, as trustee for certain of the notes, initially rejected the plan because of its concerns regarding Alterra's ability to perform all of its monetary and non-monetary obligations under an amendment between Pita General Corp., ZC Specialty Insurance Co., Center Reinsurance Ltd., LaSalle Bank, AHC Tenant Inc., AHC Acquisition Co., Selco Service Corp. and Bank One.

Bank One has had discussions with Alterra, and based on the progress of the discussions, has informed the court that it wants to change its vote to accept.

Previously, on Oct. 29 Alterra obtained court approval for an agreement for it to purchase partnership interests in its limited partnerships for the allowance of the bankruptcy claims of $6 million and a promissory note of $2.9 million.

The settling parties have agreed to a mutual release and the limited partnerships and settling partners agreed to withdraw all objections to confirmation. Also, 35 of the 48 settling partners have authorized representatives to vote in favor of the plan. The 35 represent $5.3 million, or 90%, of the $6 million claim.

The note will be an obligation of reorganized Alterra. The allowed claim will be treated as a class 6 claim under the reorganization plan.

The settlement agreement received no objections in court.

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