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Success Stories

Liquidating Trustee/Chief Restructuring Officer – SCI

TIC Properties Sold to Date: 21

Loan Recovery and Vacant Land Proceeds: $9M

Distribution to Creditors: $20.7M

BACKGROUND

Bill Hoffman, Trigild CEO, was appointed Liquidating Trustee after serving as Chief Restructuring Officer over the bankruptcy estate of Secured California Investments, Inc. and SCI Real Estate Investments, LLC, two companies that had implemented a complex TIC investment structure through which $1.6 billion of real estate had been purchased. SCI’s assets consisted of equity in various TIC structures, receivables on a loan, ownership interest in vacant land and deferred acquisition fees that would be earned when the property was sold or refinanced.

CHALLENGES

  • The Trust owned a minority interest in most properties and all sales required unanimous consent from the Tenant in Common ownership group, sometimes up to 30 separate Tenants in Common.

APPROACH

  • Establish the dual purpose of liquidating assets for maximum value and resolving claims against the estate for the benefit of all creditors
  • Oversee the day-to-day operations of the debtor entities.
  • Draft the Plan of Liquidation and accompanying legal documents
  • Secure exit financing on behalf of the estate in order to tide the debtors over until Plan confirmation.
  • Analyze and resolve claims against the Liquidating Trust
  • Identify and value Trust Assets
  • Create and implement a strategy for the sale of the assets in order to maximize the dollars available to pay creditors

PERFORMANCE SUMMARY

  • While the engagement as Liquidating Trustee is ongoing, Mr. Hoffman and Trigild have been successful in resolving all claims against the Trust, including the successful prosecution of fraudulent transfer litigation in bankruptcy court which resulted in a more than $15 million benefit to the remaining beneficiaries of the Trust
  • Liquidated those assets for which the trustee had control: the note and vacant property
  • Created a strong market for the remaining assets to be sold either individually or as part of a larger portfolio sale which allows the Liquidating Trustee to choose the sales option that makes the most sense economically and provides the biggest benefit to the Trust beneficiaries
  • To date, Trigild has approved and participated in the sale of 21 properties within the portfolio and distributed $20.7 million to creditors. Trustee expects to continue to recover additional assets for the Trust on the remaining 21 properties.