• General Growth Says It Didn’t Default

    A lawyer for General Growth Properties Inc said the No. 2 mall owner in the United States is planning to fight two court rulings ordering the company to pay about $100 million in additional interest relating to loans it made prior to its bankruptcy two years ago, Reuters reported on August 16.

    Court documents showed Chicago-based General Growth was ordered to pay $11 million to the State of New York’s Common Retirement Fund and about $89 million to a group of lenders that constituted a 2006 bank credit line. Chicago-based General Growth said that in both payments it did not have to pay the higher default rate plus legal and agency fees, and that the missed payments did not constitute a default, according to Reuters. The payments relate to higher interest payments triggered after General Growth missed loan payments prior to filing for bankruptcy protection.

    The company became the biggest U.S. real estate bankruptcy case after it filed for protection from its creditors in April 2009. General Growth emerged from bankruptcy in November 2010, funded by investments from Brookfield Asset Management, William Ackman’s Pershing Square Capital LLC and others.

    While the company repaid its creditors in full, Reuters reported General Growth repaid the New York pension fund and the 2006 credit facility lenders based on non-default interest rates.

    General Growth is asking the U.S. Court of Appeals Second Circuit to take its appeal of Judge Allan Gropper’s order that the company to pay the difference between the two rates.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • Giordano’s Owner Alleges Plot Against Business

    The owner of the Giordano’s pizza chain filed a lawsuit of more than $100 million against several franchisees, his bankers and his former lawyers on August 4, 2011, claiming that they had a long-running plot to put him out of business, according to the Chicago Tribune. The pizza chain filed for bankruptcy protection in February.

    Owner John Apostolou filed a 72-page lawsuit on in Cook County Circuit Court, alleging breach of fiduciary duty, fraud, defamation and conspiracy to defraud, among other things, according to the Tribune. The chain’s operations were turned over to a bankruptcy trustee in May after Apostolou fired his attorney and worries arose about whether the company’s assets were being protected. Apostolou no longer runs the chain and is banned from the premises.

    The lawsuit claims that Allen Aynessazian, chief financial officer for Giordano’s, and James Roche, a lawyer for both the company and Apostolou, enlisted Fifth Third Bank, Giordano’s chief lender, as well as Chicago lawyer Michael Gesas  and several  Giordano’s franchisees “to participate in the scheme” in which they’d push the Apostolous out and take over the company.

    In 2009, Apostolou had expanded the business to 48 locations with annual sales of $168 million after originally buying the chain in 1988.

    Benjamin Brand Services – Chicago bankruptcy lawyers