LOS ANGELES BANKRUPTCY BLOG
More Chapter 11 Bankruptcy Filings for California Real Estate Developer
Jul 01, 2011
Four companies belonging to a California real estate developer filed for Chapter 11 bankruptcy last week. The companies belong to developer Abe Alizadeh. This isn't the first time that Alizadeh has been to bankruptcy court. His restaurant businesses also filed for bankruptcy in 2008 and 2009.
Alizadeh, a Persian immigrant, owned several successful Jack in the Box and T.J.I. Friday’s restaurants. He was also hugely successful as a commercial real estate developer, owning dozens of office complexes and shopping centers. Since then, most of the Jack in the Box properties have been sold, while the other properties remained abandoned.
Last week, four more companies belonging to Alizadeh filed for Chapter 11 bankruptcy protection. These companies were involved in the construction of the Eureka Ridge Plaza, the Stone View Plaza Office Complex and several other commercial and office properties. The Chapter 11 papers were filed in federal Bankruptcy Court in Sacramento. The bankruptcy petition lists the largest creditors, including Wells Fargo Bank with more than $50 million in loans. Alizadeh also owes Mechanics Bank more than $50 million.
A Chapter 11 bankruptcy is usually filed in order to help a business continue operating while the restructuring is conducted. During this period of time, the business has the opportunity to restructure debts and reorganize the business. Once a California bankruptcy lawyer files for Chapter 11, the business has 120 days to present a plan for reorganization to the bankruptcy court.
The plan must be approved by the creditors and the bankruptcy court. If the creditors do not approve of the reorganization plan, then a court can approve a plan that was previously rejected by the creditors. However, the plan must be determined to be equitable and fair to all creditors. After the reorganization plan has been approved and confirmed, the business’ debts are discharged according to the reorganization plan.
