The Crescents OK Pre-Packaged Bankruptcy Plan

The two entities have been working toward the agreement since the year's start after the REIT retreated on a bail-out plan of Crescent Operating Inc., known in inner circles as COPI. The REIT is putting up $14 million, instead of a previously announced $18 million, to bankroll COPI's pre-packaged bankruptcy, which comes with Crescent common stock provisions for COPI shareholders.

Crescent CEO John C. Goff says the now-signed agreement provides "for the immediate acquisition by Crescent of the assets." The REIT also will get COPI's voting interest in several residential communities.

The REIT, by law, can't assume COPI's 40% interest in the AmeriCold Logistics temperature-controlled properties held jointly with Vornado Operating Co. Crescent and Realty Trust own AmeriCold's real estate assets while their operating companies control the business. To assume those assets, Crescent intends to set up a separate entity, to be owned by Crescent shareholders. The projected cost is about $15.5 million, an amount that will be applied under COPI's bankruptcy plan toward its bank debt.

COPI shareholders will be solicited to approve the bankruptcy plan, but a date has not as yet been set nor has the final amount they will reap from the action. Crescent anticipates the issue will total about $5 million to $8 million or about 46 cents to 74 cents per share of COPI common stock. At this stage in the asset take-back plan, Goff says the prepackaged bankruptcy will be confirmed by summer's end and so will the bottom line for COPI stockholders. He emphasizes successful completion "requires that a number of conditions be fulfilled, including the vote of COPI's stockholders and creditors and approval by the bankruptcy court.