GT Real Estate’s plan confirmation hearing pushed back to Dec. 14

By Sarah Lizee

Olympia, Wash., Nov. 17 – GT Real Estate Holdings, LLC’s plan confirmation hearing was moved to Dec. 14 following amendments recently made to the plan, according to a notice filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company recently reached a settlement with its parent and plan sponsor, DT Sports Holding, LLC, and the city of Rock Hill, S.C.

DT Sports 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 located in York County, S.C. But in March 2022, following default notices and the running of a cure period under agreements with the city, GT suspended work on the project and decided an orderly wind-down was the best path forward.

Last week, the parties to the settlement reached an agreement that aims to resolve all pending litigation between the debtor and the city and secure the city’s support for a modified plan.

Under the settlement, the city will be granted an allowed class 5 claim in the amount of $20 million.

The debtor, plan sponsor and city will execute complete, mutual releases of all claims relating to the Chapter 11 case and the project and dismiss all litigation between the parties.

On the effective date of the plan, the reorganized debtor will transfer the project site and materials to the city, subject only to a $60.5 million 8% PIK first-lien note in favor of the plan sponsor and some obligations owed to the state of South Carolina.

The city may purchase all of the plan sponsor’s rights under the first-lien note.

The right to receive distributions under the plan on account of certain class 5 claims held by Panthers Football, LLC, the plan sponsor, Tepper Sports Holding, Inc., and Appaloosa Management LP will be assigned or otherwise transferred to the city.

The debtor said the settlement will streamline confirmation and hopefully allow the plan to go effective by the end of the year.

Under the modified plan, class 5 holders that exchange voluntary releases with the debtor, the plan sponsor and their affiliates now may get proceeds from any sale of the project site once the plan sponsor recovers $10 million of its debtor-in-possession claims. Previously, class 5 claimholders would receive nothing until the DIP claims were paid in full from the sale proceeds.

The $60.5 million settlement amount provided by the plan sponsor will be the only source of recovery for holders of secured contractor claims and administrative contractor claims. If any proceeds of the settlement amount remain after payment of those claims in full, those proceeds will be used to fund distributions to holders of priority contractor claims, if any, until paid in full. If any settlement amounts remain after that, the proceeds will be distributed to holders of general unsecured claims until paid in full.

A $500,000 general unsecured creditor allocation and the remaining proceeds of the settlement amount following full repayment of the above claims will be the only source of recovery for general unsecured creditors.

The debtor will use any additional cash in its possession and any remaining availability under the DIP credit agreement to fund other payments, including administrative claims.

Any remaining proceeds from the settlement and general unsecured creditor allocation will be returned to the plan sponsor.

Other priority claims and other secured claims will be left unimpaired.

Interests will be canceled.

The Charlotte, N.C.-based real estate company filed Chapter 11 bankruptcy on June 1 under case number 22-10505.

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