Meruelo Maddux appeals court order to retract inaccurate press release

By Jennifer Lanning Drey

Savannah, Ga., Oct. 4 - Meruelo Maddux Properties Inc. appealed the U.S. Bankruptcy Court for the Central District of California's ruling ordering the company to retract a Sept. 9 press release that was deemed to be inaccurate, according to a Saturday court filing.

As previously reported, the court ruled that the release constituted an improper plan solicitation and contained substantial inaccuracies.

Meruelo Maddux's official committee of unsecured creditors asked the court to bar solicitation of the company's plan of reorganization in connection with the press release.

The company's official equity committee later joined the creditor group's motion.

The unsecured creditors asked the court to aid confirmation of the competing plan filed by East West Bank and Legendary Investors Group No. 1, LLC.

The committee said the company issued a press release on Sept. 9 entitled "East West Bank Hostile Takeover Plan of Meruelo Maddux Properties Rebuffed by Bankruptcy Court."

According to the committee's motion, East West Bank is not involved in a hostile takeover of Meruelo Maddux, and the court has rebuffed nothing.

The committee also said the company claims in the release that its plan has been approved, so there is "no need to proceed with a half-baked plan that attempts to take MMPI over."

The committee previously said Meruelo Maddux's plan has not been approved, and this statement could have a significant negative impact on plan voting.

Meruelo Maddux, a self-managed, full-service real estate company that develops, redevelops and owns commercial and multi-family residential properties, filed for bankruptcy on March 26, 2009. Its Chapter 11 case number is 09-13356.

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