Negotiates 11th hour $5M buy-out to pay 100% on Allowed Claims in Chapter 11 Bankruptcy
WEST PALM BEACH, FL (June 1, 2017) – Steven S. Newburgh, a partner in the West Palm Beach, FL office of McLaughlin & Stern, LLP, (N.Y.), gained acclaim recently in re: Pinnacle Holdings, LLC when Newburgh negotiated a win-win-win resolution. Newburgh preserved a valuable option to purchase the hotel property in Chapter 11 bankruptcy proceedings by engineering an 11th hour buy-out of the debtor's assets for $5 million dollars, repaying creditors with allowed claims and administrative expenses at 100%, a noteworthy achievement by any measure.
An extraordinary bankruptcy effort is demonstrated by Newburgh who learned one day prior to the Court-imposed deadline that the previously-approved buyer reneged on the pending purchase. Newburgh worked closely with the new buyer, negotiated the deal, filed an emergency motion to approve the sale and obtained expedited, emergency treatment of the motion to approve the transaction within 24 hours. This prevented the case from a potential conversion to Chapter 7 where the creditors would have received only pennies on the dollar and the debtor would have lost the option to purchase the hotel property.
Newburgh collected $5,000,000 in cash from the new buyer achieving the win-win-win outcome.
"There is one reason why the client successfully exited the Chapter 11 bankruptcy, and had all creditors paid. Steven Newburgh shepherded the Chapter 11 to a rare conclusion - all creditors were paid 100 cents on the dollar, and the debtor successfully exited bankruptcy," said Fredric Garvett, counsel for the 11 USC §363 purchaser of debtor assets.
Since 2016, Newburgh guided the hotel through a challenging year of Chapter 11 restructuring and reorganization, with oversight to preserve the debtor's status as a "Debtor-in-Possession."
During this phase, Newburgh recovered $300,000 on behalf of the debtor arising from an alleged premature termination of a contractual relationship with the debtor by one of its contracting parties.
"Steven Newburgh's efforts were extraordinary. Working with our counsel in a very complicated environment, he brought about consensus and influenced a positive outcome for all parties," said William Short, Senior Vice President-Commercial Lending Officer, Pinnacle Bank, Florida, who was holding the lease on the Jacksonville hotel property.