Meruelo Maddux secured creditor asks court to terminate exclusivity

By Caroline Salls

Pittsburgh, Jan. 6 - Meruelo Maddux Properties, Inc. secured creditor Legendary Investors Group No. 1, LLC objected to the company's proposed exclusivity extension Wednesday and asked the U.S. Bankruptcy Court for the Central District of California to terminate its exclusivity.

Legendary Investors said "the Supreme Court requires termination of plan exclusivity when a debtor proposes a new value plan without any mechanism for marketing the reorganized debtor's new equity."

In addition, Legendary said Meruelo Maddux's fear of competing plans and the prospect of negotiating with creditors are not enough to justify plan exclusivity.

"Continued exclusivity is the means by which entrenched management intends to remain in control notwithstanding the obvious loss of confidence by substantially all the secured creditors," Legendary said.

Meruelo Maddux, a self-managed, full-service real estate company that develops, redevelops and owns commercial and multi-family residential properties, filed for bankruptcy on March 27, 2009. Its Chapter 11 case number is 09-13356.

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