Chicago Spire bankruptcy plan wins creditor support
Chicago Tribune
Mary Ellen Podmolik
October 2nd 2014
The votes are in, and creditors tied to the Chicago Spire, the infamous project that has yet to be, like the proposed reorganization plan.
All creditors authorized to vote on Shelbourne North Water Street LP's reorganization plan cast ballots in favor of the plan, according to a report filed Wednesday night in federal court in Chicago.
The vote is a step forward in a complicated, much-watched saga that has unfolded since Shelbourne, headed by Irish developer Garrett Kelleher, was forced into Chapter 11 bankruptcy in October 2013.
Still, despite the vote, the success of the reorganization plan and Kelleher's desire to stay involved with the site's development hinge on the company's ability to come up with the money necessary to pay off creditors and, in particular, Related Cos., which owns the debt on the site at 400 N. Lake Shore Drive.
This year, Shelbourne inked an agreement with Northbrook-based Atlas Apartment Holdings under which Atlas would provide, through its own funds or funds from others, up to $135 million to pay bankruptcy claims. In return, Atlas would become majority owner of the Spire's site, working with Kelleher to develop the project that has been at a standstill since 2008.
But Shelbourne last month received bankruptcy court permission to pursue other financial backers for that deal, saying it had encountered "certain delays" in advancing its agreement with Atlas.
Related Cos. must receive more than $109 million by Oct. 31. If Shelbourne opts to defer that payment until March 31, Related must receive $22 million by Oct. 31 and more than $92 million by March 31. If either of those payment deadlines is missed, or if Shelbourne chooses not to move forward with the plan, Related would get title to the 2.2-acre site.
U.S. Bankruptcy Judge Janet Baer will conduct a hearing on the plan's confirmation Tuesday.
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