DLA Piper represented PJ Finance Company, LLC during its US$500 million debt restructuring. PJ Finance Company, owner of 32 apartment complexes with nearly 10,000 units, won court permission to restructure approximately US$500 million in debt. US Bankruptcy Judge Brendan Linehan Shannon signed an order approving the debtors’ reorganization plan.
The plan’s confirmation marked the culmination of a bankruptcy case that began with the debtors requiring protection under chapter 11 due to pressures of declining occupancy and cash flow. During the chapter 11 process, the debtors were not only able to remedy existing issues at the properties and enhance the value of the properties, but also worked collaboratively with both the creditors and the special servicer, Torchlight Loan Services, LLC, on a process to identify the sponsor for a consensual plan of reorganization. Following a highly competitive auction process, the existing equity owners of the properties, in conjunction with affiliates of Gaia Real Estate Investments and Starwood Capital, became the sponsors of the plan of reorganization under which US$22.5 million in new capital will be provided. Existing equity will retain its interests. Significantly, the plan also makes payment to all general unsecured creditors in full. The plan is expected to become effective on May 11.
DLA Piper represented the debtor and provided restructuring assistance in this extraordinarily successful bankruptcy case. The bankruptcy team was led by Richard Chesley (Chicago), Stuart Brown (Wilmington) and Kimberly Newmarch (Chicago), with Daniel Simon (Chicago), and the real estate and corporate efforts were led by William Rudnick(Chicago).
