• Investor Pays Pennies on the Dollar for Portfolio in Chapter 7 Case

    The investment firm of Smith Rothchild Financial Co. has reached a key agreement in their Chapter 7 bankruptcy case. An Indiana investor has agreed to purchase a portfolio containing 125 loans and residential properties in the Chicago area.

    REL Financial LLC based in Munster, IN has agreed to pay $237,777 for loans and properties. The amount is a fraction of the $4.9 million owed to Smith Rothchild’s secured creditors, according to U.S. Bankruptcy Court records.

    Distressed single-family homes and apartments and the loans secured by the properties are contained in the portfolio. Most of the properties are located on the South and West sides of Chicago and Gary, Ind. REL is paying $115,000 for the properties and $122,777 for the loans. The transaction is awaiting approval from the judge.

    Smith Rothchild, a Chicago based investment firm, provided short-term financing to investors that rehab properties. The firm filed for Chapter 7 protection in May of 2010. Essex Realty Group Inc. was hired in March of 2011 to market the portfolio.

    CIT Group Inc. is Smith Rothchild’s largest secured creditor with a claim of $2.9 million. Cole Taylor Bank is the second largest creditor, holding a $1.8 million claim. The portfolio’s low price means that secured creditors will receive pennies on the dollar.

    If you are considering Chapter 7 bankruptcy, contact a Chicago bankruptcy attorney. A bankruptcy attorney will discuss the filing options that are available to you.

  • Allerton Hotel Files Chapter 11 to Halt Foreclosure

    The owner of the Allerton Hotel, ALT Hotel LLC, filed for chapter 11 bankruptcy petition on May 6, 2011. Filing the case has stopped an attempt by an investor to foreclose on a $69 million loan that is secured by the property. ALT Hotel LLC is an affiliate of Petra Capital Management.

    Normal operations will continue at the Allerton throughout the bankruptcy case. The hotel is a historic property that is located on the corner of Michigan Ave. and Huron St. It is famous for its Tip Top Tap sign spelled out in neon, located at the top of the building. The Tip Top Tap had its heyday in the 1940s and 50s, closing in 1961. However, the sign stays lit to this day.

    A statement by the Chicago hotel’s bankruptcy lawyer said that “this filing is designed to protect against hostile predatory actions by one secured creditor that could have gravely adverse consequences for the hotel, its employees other creditors and vendors.”

    The question that remains is if the hotel is worth more than the loan. Stated in the petition are assets of $100 to $500 million, as well as $50 million to $100 million in debt, indicating that ALT/Petra thinks that is. The source of the valuation is unknown. Hotel occupancy levels and room rates are on the upswing, strengthening the property’s cash flow and overall value.

    If you are looking for bankruptcy information , contact a Chicago bankruptcy attorney. A bankruptcy attorney can assess your situation and advise you accordingly.

     

    Allerton Hotel Files Chapter 11 to Halt Foreclosure

    The owner of the Allerton Hotel, ALT Hotel LLC, filed for chapter 11 bankruptcy petition on May 6, 2011. Filing the case has stopped an attempt by an investor to foreclose on a $69 million loan. The hotel is the security for the loan. ALT Hotel LLC is an affiliate of Petra Capital Management.

    Normal operations will continue at the Allerton throughout the bankruptcy case. The hotel is a historic property that is located on the corner of Michigan Ave. and Huron St. It is famous for its Tip Top Tap sign spelled out in neon, located at the top of the building. The Tip Top Tap had its heyday in the 1940s and 50s, closing in 1961. However, the sign stays lit to this day.

    A statement by the Chicago hotel’s bankruptcy lawyer said that “this filing is designed to protect against hostile predatory actions by one secured creditor that could have gravely adverse consequences for the hotel, its employees other creditors and vendors.”

    The question that remains is if the hotel is worth more than the loan. Stated in the petition are assets of $100 to $500 million, as well as $50 million to $100 million in debt, indicating that ALT/Petra thinks that is. The source of the valuation is unknown. Hotel occupancy levels and room rates are on the upswing, strengthening the property’s cash flow and overall value.

    If you are looking for bankruptcy information , contact a Chicago bankruptcy attorney. A bankruptcy attorney can assess your situation and advise you accordingly.