Marriott joint plan for M. Waikiki gains support from voting classes

By Lisa Kerner

Charlotte, N.C., May 29 - The joint plan of reorganization filed by Marriott International, Inc. and Marriott Hotel Services, Inc. in the M. Waikiki LLC bankruptcy case received support from all classes of voters, according to documents filed on May 25 with the U.S. Bankruptcy Court for the District of Hawaii.

Earlier in the month, the joint plan filed by M Waikiki LLC and the Davidson Family Trust received support from all classes of voters but was rejected by Marriott International, Inc. and Wells Fargo.

The joint plan confirmation hearing is scheduled to begin on June 1.

Attorney Robert K. Sahyan, an associate with the law firm of Sheppard, Mullin, Richter & Hampton LLP certified the results of the Marriott voting.

The following voted to accept the plan:

• The holder of the Wells Fargo secured claim, representing 100% of the voters in class 3 and 100% of the $115.8 million in value;

• The holder of the R.D. Olson secured claim, representing 100% of the voters in class 4 and 100% of the $1.84 million in value;

• The holder of the Marriott secured claim, representing 100% of the voters in class 5(a) and 100% of the $1 million in value; and

• The holder of the Marriott unsecured claim, representing 100% of the voters in class 5(b) and 100% of the $38.8 million in value.

As previously reported, the disclosure statement for the Marriott plan was approved in April.

Under its proposed plan, Marriott would buy the estate's assets.

Specifically, Marriott intends to transfer an amount sufficient to fund the plan and the release of the Marriott secured and unsecured claims.

In exchange for the funding, the estate would transfer all its assets to Marriott, including claims brought by the estate before the bankruptcy court or otherwise.

The Marriott plan provides for payment in full in cash of allowed claims for all classes, except equity interests, according to the plan's associated disclosure statement.

Equity interests will be extinguished and receive no distribution under the plan.

Cash consideration for the Davidson Trust debt will be set aside pending resolution of the Davidson loan dispute.

If Marriott is not the successful purchaser, Marriott will not waive or release its secured or unsecured claims.

If Marriott is the successful bidder, the reorganized debtor will manage the hotel exclusively and retain title, ownership, possession and control.

M Waikiki, a San Diego-based hotel investment company, filed for bankruptcy on Aug. 31, 2011. The Chapter 11 case number is 11-02371.

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