540 West 21st Street gets conditional approval of disclosure statement

By Sarah Lizee

Olympia, Wash., Feb. 2 – 540 West 21st Street Holdings LLC received conditional approval of the fourth amended disclosure statement for its amended Chapter 11 plan of liquidation, according to an order filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

The combined hearing on final approval of the disclosure statement and confirmation of the plan is scheduled for March 13.

The plan contemplates the sale of substantially all of the debtor’s assets and provides that the effective date will occur on or shortly after the closing of the sale. After that, the debtor will be dissolved.

Under the plan, $1.25 million of unsecured claims and $1.25 million of general unsecured trade claims will be paid in full.

Holders of $90.69 million first-lien claims are expected to receive a recovery of 71% via a cash payment when the sale closes.

Holders of $28.18 million of DZ claims are expected to receive a recovery of 45% via a pro rata share of the general unsecured claim recovery pool plus a carveout.

Holders of $8.01 million of Gutkind claims are expected to receive a recovery of 50% via a pro rata share of the general unsecured claim recovery pool plus a carveout.

Holders of $1.49 million of IRHA trade claims are expected to receive a recovery of 46% via a carveout.

Holders of Casco claims, intercompany claims, subordinated claims and equity interests are expected to receive nothing under the plan.

The New York-based real estate holding company filed Chapter 11 bankruptcy on Aug. 2 under case number 23-11053.

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