Selected as interim CEO by creditors’ committee and approved by lenders to lead Chapter 11 bankruptcy reorganization of California based real estate investment company accused of managing an alleged ten year or longer Ponzi scheme; The company’s organizational structure at bankruptcy consisted of about 2000 investors, 60 equity real estate partnerships, 90 debt and other subordinate debt partnerships and related operating companies; The company’s properties consisted of 46 apartment communities with 5342 apartments, over 350,000 square feet of office, retail and industrial space, as well as vacant land held for development, delinquent payables and aged receivables; The company had accumulated over $160,000,000.00 of secured lender debt and about $75,000,000.00 of subordinate and unsecured debt, inter-company loans and investor promissory notes.
As CEO, John formed a new management team, retained and lead the legal and accounting professionals through the re-organization process to a court and creditor approved plan of reorganization within 23 months of the company filing Chapter 11 bankruptcy; John established credibility with the secured lenders, creditors, employees and company investors; Cash collateral agreements were negotiated and honored with lenders; Business plans, budgets, cash flow forecasts were crafted and implemented; Litigation was managed and settled and creditor issues were successfully negotiated and settled; New software, accounting, bookkeeping systems and personnel reporting timelines were designed; Organizational responsibilities and job descriptions and personnel reporting was designed; Investor reporting systems were designed and transfer agent services were implemented; Secured and unsecured loans were negotiated, modified, reinstated or restructured, as necessary.
The company was reorganized as a roll up of all the equity and debt partnerships and companies into a new public company Delaware LLC registered with the SEC with equity shared equally between all original equity investors and subordinate secured and unsecured debt and note holders, regardless of priority. John lead the company through its financial crisis and complex restructuring and directed the investor, partnership and income tax and SEC public reporting requirements and delivered the company’s first post bankruptcy unqualified first year annual audit.
Upon completion of the restructuring and formation of the newco public LLC roll up, members of the LLC had over one hundred million dollars of equity and were postured as a new major competitive real estate owner and self managed operator of a restructured portfolio of about 60 plus multi-family, industrial, retail and office properties and land held for development in northern California with financing and a successful plan of reorganization in place.