Bankruptcy courts have substantial discretion to modify the terms of loan agreements through reorganization plans.1 On Dec. 30, 2011, Judge Eileen Hollowell of the U.S. Bankruptcy Court of Arizona exercised this discretion and approved a controversial reorganization plan (the Plan) for Transwest Resort Properties and its affiliates (collectively Transwest).2 The Plan makes significant modifications to many of the material provisions in the loan documents of the senior secured claimant, JPMCC 2007 C-1 Grasslawn Lodging (JPMCC).3
Specifically, the Plan extended the remaining term of the loan from 2017 to 2033, increased the principal amount of the loan from approximately $200 million to $240 million, and cut the interest rate of the loan from 5.625 percent to 5.25 percent.4 The Transwest resorts, which constituted JPMCC’s collateral under the loan documents, were valued at $92.5 million and Transwest’s indebtedness amounted to approximately $247 million.5 JPMCC objected to the proposed Plan because of its extreme modifications to the original loan documents.6
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
