U.S. Trustee seeks to dismiss or convert Barnes Bay Development case

By Jim Witters

Wilmington, Del., Oct. 21 - The U.S. Trustee is seeking the dismissal or conversion of Barnes Bay Development Ltd.'s Chapter 11 case, according to documents filed Friday with the U. S. Bankruptcy Court for the District of Delaware.

The trustee stated that "the plan was not confirmed and it appears that the debtors will be and are unable to confirm a plan as it appears that the Chapter 11 cases are administratively insolvent. There appears to be a substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation."

A hearing on the motion is scheduled for 2 p.m. ET on Nov. 22, according to court documents.

As previously reported, the court determined on Oct. 3 that there was no prospect for a confirmable Chapter 11 plan in the case. The only remaining unresolved dispute in the case is the payment of professional fees.

At that time, the debtors, the official committee of unsecured creditors and three creditors who had sought a dismissal of the case reached an agreement to postpone dismissal until all professional fees were submitted.

In July, an affiliate of Starwood Capital Group bought the Viceroy Resort and Residences in Anguilla, British West Indies. Starwood held the $358 million mortgage on the property.

Barnes Bay, the developer of the Viceroy Resort and Residences in Anguilla, British West Indies, filed for bankruptcy on March 17, 2011 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 11-10792.

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