BSPV-Plano disclosure statement approved; plan hearing April 13

By Sarah Lizee

Olympia, Wash.., Feb. 24 – BSPV-Plano, LLC’s disclosure statement for its Chapter 11 plan was approved by the U.S. Bankruptcy Court for the Eastern District of Texas, according to an order filed Friday.

The plan confirmation hearing is scheduled for April 13.

The principal asset of the debtor is the independent senior luxury apartment community known as the Bridgemoor at Plano, which the debtor believes will provide “more than enough” value to pay all creditors in full over time.

The project isn’t finished yet and is about two years from stabilization, at which point it will reach its true market value, the company said.

BSPV said that about $1.5 million is needed to complete the project, and much more is needed to properly market and open the project, all of which the debtor’s equity holders have committed to fund.

The company said that if it is given enough time to complete the project and ramp up leasing, all creditors will be able to be paid in full.

Under the proposed plan, administrative claims will be paid in full on the effective date, and secured tax claims will be paid shortly after the effective date.

The plan proposes to pay bond A/B secured claims in full over seven years. The first two years won’t have any amortization, while the remaining payments include amortization over a 40-year basis, with a balloon payment at the end of the plan. This class will bear interest under the plan at 5.15%.

Bond C and D secured claims will also be paid in full over seven years, with the first two years without amortization and the remaining payments including amortization over a 40-year basis, with a balloon payment at the end of the plan. These classes bear interest under the plan at 5%.

Class 6 consists of the DIP loan, which was provided by an insider of the debtor. It came due on Dec. 31, but the company didn’t have enough funds to make the payment. However, the lender agreed to extend the loan indefinitely so that it would be repaid only when the bonds are paid in full, or later, such as when the project is sold or refinanced. The lender will keep its liens securing the loan.

There is an option where the DIP loan may be converted into new equity in the debtor on a preferential basis, and a mechanism where the debtor’s equity interest holders may purchase a portion of the DIP loan at par in order to participate in the conversion.

While the holders of the A&C Hauler secured claim and the BKJ secured claim must prove their claims, if they are allowed, they will be repaid with a lien securing the repayment, if they vote for the plan. To the extent the claims are allowed, they will be repaid through quarterly payments over five years, with 5% interest. And, if the holders vote to accept the plan, they may compel the debtor to pay 50% of the claims shortly after they become allowed.

If the holder of the CJ project management secured claim votes to accept the plan, it will get a junior lien, ensuring that any claim it is allowed is paid through quarterly payments over four years. If the holder votes for the plan, the plan provides for the allowance of the claim at $200,000 and a release by the debtor of its claims and counterclaims.

Unsecured claims will be paid without interest in full through quarterly payments over four years. There is an option to each holder whereby the debtor will pay the claim through a one-time payment of 33% of the allowed amount of the claim.

The plan retains all equity interests. But, other than with the 2% interest of Spectrum Housing Corp., the plan contains a mechanism under which the capital accounts, or ownership interests, of the debtor’s members will be adjusted to take into account additional prepetition and post-petition equity contributions they have made toward the construction of the project and the funding of the debtor’s costs and expenses.

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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