Zuca Properties pre-packaged Chapter 11 plan effective as of March 7

By Sarah Lizee

Olympia, Wash., March 8 – Zuca Properties LLC’s pre-packaged Chapter 11 plan went into effect on Monday, according to court documents filed with the U.S Bankruptcy Court for the Southern District of New York.

The plan was confirmed on June 15, 2021, as previously reported.

When Zuca filed its Chapter 11 petition, the two condominium units it owned were encumbered by multiple mortgages. Zuca was also in default of its obligations to JPMorgan Chase Bank, NA and Tecref Sarl.

Zuca engaged in discussions with JPMorgan and Tecref to chart a path forward, and ultimately, the debtor determined that the best way to successfully accomplish a sale and to preserve and maximize value of its assets was through the pre-packaged Chapter 11 filing.

Based on the estimated property values of the condo units, Zuca anticipated that JPMorgan as first-lienholder would be paid in full out of the proceeds of the sales.

Tecref’s secured claim was also to be paid in full in cash, as well as other secured claims, according to the disclosure statement.

Priority claims and convenience claims were also to be paid in full in cash.

Holders of unsecured claims other than convenience claims were to receive their pro rata share of available cash.

Equity interests were to be reinstated but without any distribution to holders until all unsecured claims had been satisfied in full.

The Geneva-based owner of two penthouse condominium units located in New York filed bankruptcy on June 7, 2021 under Chapter 11 case number 21-11082.

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