The San Francisco Superior Court granted the landlord, 333 Bush Associates, a writ of attachment for $48 million. The move makes the landlord a secured creditor, freezes a portion of Heller’s assets for the landlord, and leaves other unsecured creditors at a disadvantage, essentially waiting in line behind the landlord for dibs on leftover assets.
If within 90 days Heller files for bankruptcy, or if three of its creditors force it into bankruptcy, then the writ is automatically stayed. That would make the landlord an unsecured creditor once more, and put all unsecured creditors on an equal footing.
Peter Benvenutti, a member of Heller’s dissolution committee and now a partner at Jones Day, said negotiations are continuing with the landlord.
Bush Associates sued Heller for $85 million on December 4th. It’s one of several suits filed against the defunct firm.
The firm’s Washington, DC landlord sued for $31 million in late October. Document management service Williams Lea sued last week for $3 million, which includes the cost of severance pay to employees. At least two lawsuits have been filed by former employees seeking lost wages, severance and vacation pay under state and federal WARN Act violations.
Three creditors can force a debtor into bankruptcy if the debtor has at least 12 creditors, and the three are owed more than $13,475. Heller has dozens of such creditors.
Via The Recorder.