Creditors to vote on future of Chicago Spire project

Ballot to take place to allow $135m debt-restructuring plan

Artist's impression of The Chicago Spire by Santiago Calatrava.

Artist's impression of The Chicago Spire by Santiago Calatrava.

Sat, Aug 30, 2014, 01:01

Creditors of the stalled Chicago Spire project, which has been championed by Irish developer Garrett Kelleher, will be able to start voting on a debt-restructuring plan in early September.

Ballots and copies of the plan are due to be sent to creditors on September 4th, US bankruptcy judge Janet Baer was told last week at a hearing in Chicago. The plan involves a $135 million investment by Atlas Apartment Holdings, an international serviced apartment developer and manager.

This would allow the company behind the project pay $120 million in allowed claims off in full.

This process, if agreed by creditors, will give Atlas control of the site for the Spire by the end of October.

In bankruptcy court last Wednesday it emerged that Mr Kelleher wants to be allowed to seek out a better deal from a partner other than Atlas.

‘Unreasonable

’ “Mr Kelleher wants to build this Spire,” said Joseph

Frank, his attorney. “Everyone on the face of the earth knows that,” Judge Baer replied.

Atlas, the court heard last Wednesday, wanted its break-up fee – the sum due if the deal falls through – to be increased from $3.75 million to $6.75 million in return for Mr Kelleher being granted this right.

Leonard Parkins, an attorney acting for Relates Cos, the fund that acquired the debt on the Spire from the National Asset Management Agency, said such a large break-up fee was “unreasonable”. “They haven’t earned it,” Mr Parkins said.

Questions were also asked in court about how Atlas was funding its $135 million investment. “Atlas believes it can satisfy the court that it has a commitment,” said Douglas Bacon, an attorney for Atlas.

He could not reveal more detail, citing “the press in courtroom”, he added.

It is unclear that if the issue of a break-up fee been resolved but the fact a copy of the plan is to be sent to creditors on September 4th suggests it either has been or is close to being resolved.