Marbury Plaza’s motion for more DIP financing draws trustee pushback

By Sarah Lizee

Olympia, Wash., April 26 – MP PPH LLC’s (Marbury Plaza) motion seeking approval to increase its $10 million debtor-in-possession note facility by $8 million drew an objection from Region 4 U.S. trustee Gerard R. Vetter, according to documents filed Friday with the U.S. Bankruptcy Court for the District of Columbia.

The lender is PP & H Realty, LLC, the 100% equity owner of the debtor.

Vetter noted that although the DIP note is unsecured, it requires repayment of all amounts due under the note at closing of the sale of the debtor’s property, including principal, interest and fees.

The debtor has engaged in the marketing of its property, but there is no sale agreement in place, and the case has been pending for over seven months now, the U.S. trustee said.

“The value of the property remains unclear as the debtor has not provided any evidence to support the $100 million scheduled value,” Vetter said, adding that it also isn’t clear what the current amount of the liens against the property are.

“There has been no disclosure in the motion with regard to the purported equity in the property, if any, and to the debtor’s ability to pay the note at closing of the sale of the property,” the U.S. trustee said.

“Given these uncertainties with regard to the equity in the property, it appears that the debtor is asking the unsecured creditors in this case to sacrifice their distributions from the proceeds of a sale for the insiders’ benefit, both by receiving immediate repayment of the principal amount of the loan, interest, fees and attorneys fees at closing of the sale, as well as the potential releases that the debtor’s will seek to have approved in connection with their plan.”

Vetter noted that he plans to object to any third-party releases that are proposed in a Chapter 11 plan, including a release proposed for PP & H.

The Melville, N.Y.-based company owns the Marbury Plaza, a 674-unit low-income tax credit and market-rate multifamily apartment complex in Washington, D.C. The debtor filed bankruptcy on Aug. 31, 2023 under Chapter 11 case number 23-00246.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.