Posted 8/13/2012 12:00 am
Updated 9 months ago
Jonesboro developer Bruce Burrow said Wednesday that his preliminary Chapter 11 bankruptcy filing made his financial situation look worse than it actually was.
Although Burrow, 69, listed his debt at between $50 million and $100 million on his filing, most of the debts reported — which totaled at least $53 million — are for personal guarantees he made for the limited liability companies he has an interest in.
Those LLCs haven’t filed for bankruptcy, so one of the few ways Burrow would be on the hook for the money is if there were a default and the bank chose the unusual step of not liquidating the property but suing Burrow for the money, according to Burrow’s bankruptcy attorney, Kevin Keech of North Little Rock.
“Mr. Burrow has reason to believe his assets exceed his liabilities at this point in time,” Keech said in an interview with Arkansas Business. “Having said that, we don’t know what the market is going to bring.”
Burrow listed his estimated assets at between $10 million and $50 million.
Keech said he and Burrow were working to file the complete schedules, which are due Aug. 13. But he has asked for an extension until Aug. 27.
Keech said he and Burrow were “trying to get our arms around” the amount of debt owed.
Keech said he also was working on a plan that would allow Burrow to exit bankruptcy as quickly as possible. He wouldn’t elaborate on the plan.
Burrow said the sluggish economy set him on the path to bankruptcy. Retailers held off expanding or opening stores. “Of course, that’s the oil for our engine,” he said.
The final trigger was when a bank, which Burrow declined to name, “chose to come after me on my guarantee … and tried to get my house and cars,” Burrow said. “I learned the game of hardball real fast.”
Burrow’s preliminary filing includes the 20 largest unsecured creditors, which are all banks. All the debts are listed as contingent or disputed.
Liberty Bank of Arkansas has two claims totaling $16.4 million. One of the claims is for $14 million and is tied to Burrow’s guaranty of HLR LLC, which has collateral of the Hilton Hotel in Little Rock. The value of that hotel is listed at $24 million.
IberiaBank of Lafayette, La., has three claims against Burrow totaling $10.92 million. One of the claims is for $4.4 million connected to a guaranty of MBC Holdings Worldwide LLC. The collateral on that loan is the Brandon Building in Little Rock, which has a value of about $5.4 million. MBC Holdings manages about 1.5 million SF of commercial property. Among its prominent Jonesboro properties under management are The Mall at Turtle Creek, Turtle Crossings and Shoppes at Turtle Creek.
Metropolitan National Bank of Little Rock has a $5 million claim against Burrow for a guaranty of MBC Holdings Worldwide LLC. The collateral on that loan is an office building in Jonesboro that has a value of $5.5 million.
‘I Just Needed Time’
Burrow told Arkansas Business Wednesday that he was working to sell some of his property and had some deals in the works.
“That’s the goal, to work them out and sell them off and not have a fire sale,” he said. “I’ll get it worked out. I just needed time to do it.”
Burrow said the commercial real estate market recently had improved. And he said he wanted to negotiate the sale of his properties because he knows their value better than do the banks.
“The banks are only interested in getting their loan back,” he said. “I’m interested in getting the value of the property back.”
After the bankruptcy is completed, Burrow said, he plans to continue being a developer, which he’s been for about four decades.
“These are stressful days, but it’s still in a field that I love,” he said. “This is like the third quarter to me. ... My goal is to liquidate these properties, ... pay the creditors back and continue to do what I’ve done all my life.”