If the court took away the landlord and banks' statuses as secured creditors, they would be on equal footing with the unsecured creditors, including employees seeking unpaid wages.
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published December 31, 2008
By Maria Laus, Author - LawCrossing
12/31/08
Leslie Corwin, an attorney from Greenbery Traurig, said that the firm's dissolution committee had initially wanted to avoid the added costs of bankruptcy so that more money could go to creditors. Because of the bank's ''intransigence during settlement negotiations'' and the landlord's writ of attachment, Chapter 11 became a necessary step according to a memo send Sunday to all Heller employees.
The memo also said that collection of any accounts receivable over the past three months has been strong and that the bankruptcy was not prompted by the firm running out of money.
As for the goals of the bankruptcy, Heller wants to negate the security interests of both its banks and its San Francisco landlord. The firm also seeks to void its' bank status as secured creditors. Bank of America, speaking on behalf of Citibank as well, made a uniform commercial code citing that the dissolution committee claims terminated its security stake in the firm. Claiming that this was a ''clerical error,'' the banks have decided to renew their security stake in the firm and filed an amendment in October to renew the interest.. Heller asked a bankruptcy court to void the October amendment.
If the court took away the landlord and banks' statuses as secured creditors, they would be on equal footing with the unsecured creditors, including employees seeking unpaid wages.
If the court took away the landlord and banks' statuses as secured creditors, they would be on equal footing with the unsecured creditors, including employees seeking unpaid wages.
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