EnCap files reorganization plan based on remediation, property sale

By Caroline Salls

Pittsburgh, Oct. 1 - EnCap Golf Holdings, LLC and debtor NJM Capital, LLC filed their joint plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of New Jersey.

EnCap said it plans to maximize the value of its assets through the continued remediation and ultimate sale of its real estate.

According to the disclosure statement, the company's AIG affiliates will contribute at least $45 million from the proceeds of a policy and performance bond to fund the remediation plan.

The amounts contributed by the AIG affiliates will reduce, on a dollar for dollar basis, the performance bond's penal sum by the amount of the total funds advanced.

With the site remediated, the company said the property can be sold to a developer, with the goal of securing funds to make distributions to creditors.

The proposed plan creditor treatment includes:

• Holders of administrative claims, priority tax claims, debtor-in-possession facility claims against EnCap and other priority claims will recover 100% in cash;

• Holders of Wachovia senior bond claims, iStar and Cherokee loan II subordinate bond claims and secured municipality claims will receive cash from the sale proceeds up to the full amount of the claim. Claimants will retain the liens on the collateral securing the claim pending the sale;

• Series 2005E bondholder claims will retain the lien on the collateral securing the claim and the claims will be paid in accordance with the bond indenture;

• Holders of tax sale certificates and construction liens will have their share of sale proceeds placed in reserve pending EnCap's analysis of the priority, extent and validity of their liens. If these claims are found not to be liens, they will be treated as general unsecured claims. If they are allowed as lien claims, the claims will be reinstated to the extent of the value of the underlying property;

• Holders of other secured claims will retain the lien securing their claim and will receive either cash equal to the amount of the claim or the return of the collateral securing the claim;

• Holders of general unsecured claims will receive distributions from reorganized EnCap, including an initial distribution and subsequent distributions of available cash; and

• Holders of equity security interests will retain their equity securities and receive a share of any distributions left from reorganized EnCap after general unsecured claims are paid in full.

EnCap, a Cherokee Investment Products subsidiary, filed for bankruptcy on May 8. Its Chapter 11 case number is 08-18581.

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