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AMT to file new plan

by Aviva Gat | Published October 25, 2011 at 1:53 PM

Florida real estate developer AMT LLC will file an amended Chapter 11 plan after its inability to close a loan halted confirmation of its original reorganization proposal.

The Destin, Fla., company was set to seek confirmation of its plan from Judge William S. Shulman of the U.S. Bankruptcy Court for the Northern District of Florida in Pensacola on Monday, Oct. 24, but during the hearing AMT announced that it would submit an amended plan, according to Jane Kerrigan of Arnett & Kerrigan PL, counsel to creditor Destin Pointe Owners Association Inc.

Documents show AMT could not close a $14.1 million debtor-in-possession loan from Omega Commercial Finance Corp., which AMT had said would fund its reorganization.

Kerrigan said she thinks the debtor will file a new plan once it finalizes its financing commitment, but she was unsure if AMT is still pursuing the Omega financing or looking for a new lender. She said the court did not set any deadlines for AMT to file a new plan.

Debtor counsel J. Steven Ford of Wilson, Harrell, Farrington, Ford, Wilson, Spain & Parsons PA could not be reached on Tuesday.

According to an Oct. 13 objection to confirmation filed by U.S. Trustee Donald F. Walton, the DIP was set to close Aug. 17. When AMT failed to close the loan, it anticipated a new closing date, Sept. 26, and was again unsuccessful.

Walton said the plan failed to set a closing deadline for the loan and failed to provide a backup plan if the loan did not close. Walton also said the debtor had failed to provide any updates about the loan's status and had not filed any monthly operating reports since it filed for Chapter 11 on May 27.

The owner of 11.77 acres of undeveloped waterfront land on island resort Destin Pointe had obtained court approval of the Omega loan on Aug. 18. It was to repay secured creditor Jefferson Bank and Trust Co., owed $5.1 million, on closing of the loan, after which Omega would have held a first lien on the property.

The DIP, which was to remain outstanding as an exit loan after confirmation, had a 10.75% interest rate and was to mature 36 months after the first day of the month following the closing date.

AMT could have extended the DIP for one year for a 1% extension fee. The DIP also had a 1% exit fee, 2.5% origination fee, 2% consultant fee, 0.5% referral fee and $350,000 consultant protection fee.

The loan also carried a 2% breakup fee if the debtor decided to pursue DIP financing from another lender

AMT filed the DIP motion on Aug. 9 but had negotiated the DIP on its petition date, documents show.

AMT then filed its disclosure statement and related plan on Aug. 25. The plan anticipated that the Omega DIP would pay all creditors in full and give it time to find a developer for the property or market it for sale.

Several creditors, including Jefferson Bank, Gray Robinson PA and Destin Pointe Owners Association, objected to the plan, asserting it was not feasible.

Gray Robinson, for example, said in its Oct. 17 objection that the plan was unfair to unsecured creditors, which were deemed to have accepted the plan because their claims would allegedly be paid in full. The law firm said that because unsecured creditors would not be repaid with interest, they should have been deemed impaired and been allowed to vote.

In its disclosure statement, AMT valued its property at $27.85 million, citing a March 2011 appraisal. The disclosure statement did not disclose why AMT filed for Chapter 11.

Jefferson Bank's Oct. 14 confirmation objection, however, asserted AMT sought bankruptcy protection to avoid a foreclosure on its property. The bank said AMT defaulted on its debts to the bank on March 17, 2010, leading Jefferson Bank to file a foreclosure action in the Circuit Court in Okaloosa County, Fla., on June 4, 2010. The court entered a judgment in favor of the bank on March 29, 2011, and the lender then scheduled a foreclosure sale for May 31. AMT filed for bankruptcy four days before the scheduled sale.

Jefferson Bank had extended a $1 million loan to AMT on April 24, 2003 and a $3 million loan on Sept. 20, 2007.

Destin Pointe is a beach island resort between Pensacola and Panama City on the Florida Panhandle. AMT also owns Destin Point Realty Inc., which rents and sells cottages and condominiums in the resort.

In schedules, the company listed $30.7 million in assets and $5 million in liabilities.

Jefferson Bank's counsel, Roland W. Kiehn of Barron, Redding, Hughes, Fite, Sanborn, Kiehn, Leebrick & Dickey PA, could not be reached for comment.

Leyza F. Blanco of Gray Robinson represents the law firm.

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Tags: AMT LLC | bankruptcy | Chapter 11 | real estate | U.S. Bankruptcy Court for the Northern District of Florida in Pensacola

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