Bankruptcy options are designed to help both struggling individuals and companies based on their unique situation and circumstances. With regards to commercial property owners, businesses dealing with financial problems might find it resourceful to consider bankruptcy and how the process could offer them a fresh start.
A bankruptcy filing recently halted the foreclosure sale of a portion of a mixed-used Tennessee development . Following the bankruptcy filing, a representative for the development reported that the bankruptcy filing was made in error because a message from the lender of the $27 million loan on the project was not received, noting that the lender would extend the terms of the loan.
As is common in business and commercial bankruptcy situations, the developer has also been working on an agreement with another lender to repay the current lender. Chapter 11 bankruptcy for businesses is a reorganization bankruptcy process that allows a struggling company time to seek new financing options without the persistence of creditors as an automatic stay prevents collection actions, including foreclosure proceedings in some circumstances, once the bankruptcy filing has been made.
The developer of the project in Tennessee is working to secure financing to begin construction on the non-office portion of the project, which was the portion of the project scheduled for foreclosure sale.The developer is hoping to begin construction on the non-office portion of the project in the spring which will include retail space and a boutique hotel. The developer is attempting to reach a leasing threshold as they work to move forward on the project.
Chapter 11 commercial bankruptcy provides different options for a struggling company based on the goals of the company, and oftentimes, it provides much-needed breathing room in the interim while the company gets things worked out. It is important for companies struggling financially to be familiar with the bankruptcy options available to them and how those options function so they can choose the best course for relief that is available to them.
Source: The Tennessean, “Bankruptcy filing halts forced sale of part of Franklin’s Ovation site,” Getahn Ward, May 18, 2017