Clarification: U.S. Trustee Submits Motion for THP Ch. 7 Bankruptcy

The following information clarifies an earlier article on this topic:

After more than two years under Chapter 11 bankruptcy, TH Properties, LLC, is working toward reorganization under that plan.

However, U.S. Trustee Roberta DeAngelis and trial attorney George Conway, have filed for a motion to convert THP's Chapter 11 Bankruptcy to Chapter 7 liquidation bankruptcy, according to court documents filed Oct. 4.

Under Chapter 7 filing, a company admits that it has passed the stage of reorganization and must sell off any unexempt assets to pay creditors.

The creditors collect their debts according to how they loaned out the money to the firm. An appointed trustee ensures secured assets are sold and proceeds are paid to creditors.

According to court documents, DeAngelis claims THP has surrendered all its collateral with all its secured lenders.

She also claims THP also failed to submit a plan of reorganization under Chapter 11.

The company has also accrued $2.867 million in post-petition payables as of August 2011. Of that, $2.64 million are unpaid professional fees, according to court documents.

THP also garnered $96,497 in case flow deficit in August 2011, according to court documents.

"The Debtor has repeated promised a plan to be forthcoming, but has yet to submit the same," said court documents filed by DeAngelis. "Hence, there does not seem to be a reasonable likelihood of rehabilitation."

In April, THP reached a settlement agreement with a real estate advisor, who had filed a motion for Chapter 7 rather than Chapter 11, according to The Reporter.

In September, more than 300 acres on Old Skippack Road once owned by THP in Upper Salford was bought by Lou Mascaro. He bought it for $3 million from First Niagara Bank, which was seized in the Chapter 11 agreement. The Chapter 7 motion was withdrawn.