Barnes Bay files plan of reorganization, disclosure statement

By Jennifer Lanning Drey

Savannah, Ga., April 1 - Barnes Bay Development Ltd. filed its plan of liquidation and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Barnes Bay filed for Chapter 11 bankruptcy to complete the sale of the Viceroy Anguilla Resort and Residences.

A Starwood Capital Group-controlled affiliate owns the $358 million mortgage on Viceroy Anguilla and expects to acquire the resort as part of the sale and bankruptcy plan, Barnes Bay said previously.

Barnes Bay has asked the court to allow the sale to take place in Anguilla in compliance with Anguillan law. The company said the process will result in an auction open to all interested bidders.

As part of the bankruptcy process, Starwood Capital will provide debtor-in-possession financing and an additional several million dollars to pay unsecured creditors if it is the successful bidder at the auction and the bankruptcy plan is confirmed.

Creditor treatment

Creditor treatment under the plan includes:

• Holdings of administrative claims will be paid in full in cash;

• Holders of debtor-in-possession pre-bankruptcy lender claims and pre-bankruptcy lender claims will be paid in full in cash; or, in the event that the lender is the buyer of the assets, either included in the debt for the Newco or discharged at the option of the lender;

• Holders of other secured claims and priority claims will receive a full cash recovery;

• Holders of purchase sale agreement unsecured claims may elect to have their purchase and sale agreement assumed by the debtors and assigned to the buyer or rejected by the debtors, in which case the holder will receive their share of a cash distribution from the PSA unsecured recovery pool;

• Holders of general unsecured claims will be entitled to a share in cash of the general unsecured creditor recovery pool;

• Holders of pre-bankruptcy lender deficiency claims will agree to waive their recovery in the event that the pre-bankruptcy lender acquires the property and acquired assets at the auction.

If the pre-bankruptcy lender is not the buyer, the pre-bankruptcy lender deficiency claim holders will receive either a distribution that is no less than the percentage recovery received by the holders of PSA unsecured claims or the general unsecured claim holders, whichever percentage recovery is higher;

• Holders of intercompany indemnity claims will receive no distribution; and,

• Holders of interests and interest-related claims against the debtors will also receive no distribution.

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

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