GT Real Estate files bankruptcy with over $100 million in debt

By Sarah Lizee

Olympia, Wash., June 2 – GT Real Estate Holdings, LLC filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Wednesday, according to court documents.

The parent of GT Real Estate is non-debtor DT Sports Holding, LLC, which is owned by Carolina Panthers owner David Tepper.

GT Real Estate was developed to own and develop a mixed-use community, sports and entertainment venue in Rock Hill, S.C., that would also include a new headquarters and practice facility for the Panthers. In 2020, GT acquired 234 acres of land located in York County, S.C.

Jonathan Hickman, GT’s chief restructuring officer, said the success of the project depended on significant financial and political engagement from the city and the county, each of which pledged significant public support to back the debtor’s substantial private investment in South Carolina through a series of agreements among the parties.

The city agreed to fund the project through the issuance of $225 million in public bonds. Those bonds were to be arranged by Oct. 31, 2020, which subsequently was extended to Feb. 26, 2021.

On Jan. 6, 2021, the city made a direct contribution of $20 million to the general operating bank account of the debtor.

Meanwhile, the county granted tax incentives to the debtor, and, on Jan. 19, 2021, funded a $21 million contribution, which was also deposited into the general operating bank account of the debtor.

Hickman said he isn’t aware of any agreement requiring the debtor to return or repay any portion of the county or the city’s contributions, other than the city’s right to receive a portion of the proceeds from any public bonds issued by the city up to the value of its contribution.

GT proceeded to spend roughly $282 million to purchase the project site and to fund a substantial portion of the construction.

Under current market conditions, and based on the original design documents, GT estimates that it would cost an additional $500 million or more to complete the project.

In March, GT suspended work on the project, and ultimately determined that the termination and rescission of its contracts with the city, following default notices and the running of a cure period under the agreements with the city, and the orderly winddown of the project was the best path forward.

GT has attempted to satisfy claims of contractors who have or would likely be entitled to have mechanic’s liens against the project, but the company doesn’t have the ability to satisfy all of the claims, Hickman said.

The CRO said it is in the best interest of the debtor to address the various claims under the protection of Chapter 11.

DT Sports has agreed to provide the debtor with $20 million of debtor-in-possession term loan financing, inclusive of a $3.2 million prepetition promissory note.

The financing is secured on a non-priming basis, junior to any valid mechanic’s liens, with minimal funding conditions and case milestones, Hickman said.

In its petition, the company listed $100 million to $500 million in both assets and liabilities.

Its largest unsecured creditors are Mascaro/Barton Malow, based in Pittsburgh, with a $26.8 million trade claim and York County in South Carolina, with a $21 million contract counterparty claim.

White & Case LLP is restructuring counsel, Farnan LLP is Delaware restructuring counsel and conflicts counsel, Alvarez & Marsal is financial adviser and Kroll Restructuring Administration LLC is administrative adviser.

The Charlotte, N.C.-based real estate company filed Chapter 11 bankruptcy under case number 22-10505.

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