BPP Texas & Affiliates - Owners of 22 Hotels Operated Under Wyndham Hotel Group Brands - File Proposed Plan of Reorganization, Propose Sale of Hotels Over Four Year Period


BPP Texas, LLC and a group of affiliated companies - BPP Illinois, LLC, BPP Iowa, LLC, BPP Michigan, LLC, BPP Minnesota, LLC, and BPP Wisconsin, LLC - filed a proposed plan of reorganization on Sunday (May 15, 2011) in their chapter 11 bankruptcy cases pending in the Eastern District of Texas bankruptcy court. The companies voluntarily filed for chapter 11 protection in December 2010 and continue to control their 22 hotel properties. All of the companies' hotel properties operate under brands controlled by the Wyndham Hotel Group, which is part of the Wyndham Worldwide family of companies (NYSE: WYN).

Sunday's plan of reorganization proposes that the debtor companies will continue to own the properties initially, but will commence an organized, orderly sale process with the goal of completing the sale of all 22 hotels over a four year period. Selling the hotels piecemeal over a prolonged period will, according to the debtors, "avoid fireside sales, 'flooding' the market, and the loss of value that would necessarily result from a lender or bank sale of collateral." In general, the debtors propose that they will begin the process by selling their worst-performing hotels first, while holding onto their better-performing hotels until the second half of the four year sale period. The debtors assert that they will generate approximately $70 million in net sale proceeds. In addition, they will continue to generate room revenue from the hotels remaining in their portfolio during the sale process.

The proceeds of the debtors' operations and asset sales will be sufficient, the debtors assert, to pay all outstanding claims (except for, potentially, some subordinated claims) against them by the conclusion of the sale process. In addition, under the plan, the debtors would pay administrative claims, priority claims, cure claims and 50% of general unsecured claims upon the plan becoming effective (or shortly thereafter). Those payments would be made using $3 million of cash on hand and an additional $1 million in funding from an insider of the debtors and their guarantors (Fine Capital Associates, L.P. and FFC Partnership, L.P.).

Learn more about BPP Texas's proposed plan of reorganization and plan for selling its assets by reviewing the proposed plan of reorganization (access a copy here: http://www.chapter11cases.com/BPP-Texas-LLC-183--Chapter-11-Plan-of-Reorganization-Debtors-Joint-Consolidated-Plan-of-Reorganization-Filed-by-BPP-Illinois-LLC-BPP-Iowa-LLC-BPP-Michigan-LLC-BPP-Minnesota-LLC-BPP-Te-_p_122174.html) and the accompanying proposed disclosure statement (access a copy here: http://www.chapter11cases.com/BPP-Texas-LLC-184--Disclosure-Statement-Filed-by-BPP-Illinois-LLC-BPP-Iowa-LLC-BPP-Michigan-LLC-BPP-Minnesota-LLC-BPP-Texas-LLC-BPP-Wisconsin-LLC-Attachments-1-Exhibit-B-2-Ex-_p_122165.html). To access more significant court filings from BPP Texas's chapter 11 cases, please visit our website: http://www.chapter11cases.com/BPP-Texas-LLC_c_14245.html

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Randall Reese, Restructuring Concepts LLC | Attorney Advertising

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