BSPV-Plano’s disclosure statement lacks information, trustee says

By Sarah Lizee

Olympia, Wash.., Feb. 3 – BSPV-Plano, LLC’s disclosure statement drew an objection from bond trustee Huntington National Bank, NA, according to documents filed Thursday with the U.S. Bankruptcy Court for the Eastern District of Texas.

The bond trustee said the disclosure statement fails to provide enough information to allow creditors, including bondholders, to decide whether to accept the plan.

Huntington gave a list of what it believes should be disclosed in the statement:

• The current going-concern value of the Bridgemoor at Plano project, the most essential data point for creditors to evaluate the plan;

• The fact that the debtor has repeatedly represented through this case that the project is currently worth more than the debtor’s liabilities;

• That millions of dollars of payments proposed to be paid under the plan cannot be made without violating a prior order of the court;

• The extent of the post-confirmation shortfall resulting from the fact that the project’s revenues do not come close to covering its expenses plus the payments required under the plan;

• That the debtor’s equity holders are not actually bound to pay those millions of dollars of shortfalls; and

• The substantial risk placed on creditors by equity’s “illusory promise” to pay the shortfalls, especially given the numerous and concealed bankruptcy filings of equity’s other real estate projects over the last two decades.

The bond trustee also said the disclosure statement contains several factual inaccuracies and mistakes, does not attach financial projections or a liquidation analysis, and fails to acknowledge significant legal disputes that prevent the plan from being confirmed.

The disclosure statement hearing is scheduled for Feb. 7.

The Plano, Tex.-based company was formed in May 2018 to acquire, own, develop and operate the Bridgemoor at Plano. It filed Chapter 11 bankruptcy on March 1, 2022 under case number 22-40276.

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