Tarragon's second amended plan of reorganization effective July 6

By Lisa Kerner

Charlotte, N.C., July 7 - Tarragon Corp.'s plan of reorganization became effective on July 6, according to a filing with the U.S. Bankruptcy Court for the District of New Jersey.

The court entered the order confirming the debtors' second amended and restated joint plan on June 18, the filing said.

As previously reported, the company filed an amended plan of reorganization in April in which the unsecured creditors of Tarragon Corp., Tarragon Dev. Corp., Tarragon South and Tarragon Dev. LLC will contribute all of their claims against the Tarragon debtors to a creditor trust, limited liability or other entity in exchange for 100% of the equity in that creditor entity.

Treatment of creditors will include the following:

• Holders of administrative expense claims, priority tax claims and unsecured priority claims will be paid in full in cash;

• Holders of UTA Capital LLC term loan claims will be paid in accordance with the term loan;

• Holders of unsecured non-priority claims will contribute their claims to the Tarragon creditor entity, which will receive its share of any distributions made by New Ansonia and its share of the net proceeds of the sale of some Tarragon assets. These creditors will also be entitled to receive a share of distributions under an operating agreement;

• The guarantees given to Federal Home Loan Mortgage Corp. and Fannie Mae will be reaffirmed;

• New Ansonia will guarantee some debt owed to General Electric Capital Corp.; and

• Holders of equity interests will receive no distribution.

Tarragon, a New York homebuilder, filed for bankruptcy on Jan. 12, 2009. Its Chapter 11 case number is 09-10555.

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