New Deal and No Deal in Panthers-Rock Hill Bankruptcy Case
Tepper’s company retracts offer for Rock Hill and York County
ROCK HILL, S.C. (WBTV) - Carolina Panthers owner David Tepper has taken a new approach in the bankruptcy case of his real estate company that paves an easy path for contractors but a more difficult road for taxpayers. Tepper’s GT Real Estate filed a new reorganization plan that excludes the original offers for Rock Hill and York County. GT Real Estate claims the city and county have chosen difficult litigation and unreasonable demands instead.
In the new filing, GT Real Estate claims both the city and county do not have claims for the $20 million and $21 million, respectively, contributed to the project, saying the money was transferred without any obligations.
“Unfortunately, the City and County have instead chosen to pursue a flawed litigation strategy, making exorbitant and unreasonable demands well in excess of their entitlements,” a GTRE spokesperson wrote in a statement.
The new plan submitted by GT Real Estate would force the city and county to pursue debts through the normal bankruptcy court proceedings. According to the filing, York County was seeking to recoup more than $80 million, including $43 million in damages to Mt. Gallant Road and $38 million in lost tax revenue. WBTV already reported Rock Hill was pursuing a Rule 2004 hearing to open up GT Real Estate to discovery and has also filed a new complaint seeking damages from GT Real Estate and accusing the company of fraud.
The new reorganization plan would still need to be approved by a judge.
The new filing comes on the heels of a WBTV Investigation that raises questions about whether the bond agreement between Tepper’s company and Rock Hill was doomed to fail from the start. Last week, the City of Rock Hill filed its own complaint alleging Tepper’s GT Real Estate had fraudulent intent throughout the negotiations that ultimately fell apart.
The entire deal collapsed with construction stopping, defaults issued and GT Real Estate filing bankruptcy all in the span of six months in 2022.
In the most recent reorganization plan filed earlier this month, GT Real Estate structured a plan it claimed would pay almost every debtor back completely.
• $60.5 million in cash funded into a settlement trust for the benefit of contractors, subcontractors and general unsecured creditors, which GTRE believes will be sufficient to pay all allowed claims in full;
• $21.165 million in cash to reimburse York County for all amounts it contributed to the project, plus interest; and
• $20.0 million or more from the available net proceeds (after clean-up and senior claims) of the sale of real property to make payments to the City of Rock Hill.
The amount for the contractors and subcontractors is the only portion that remains intact in the new plan.
In response, on Wednesday Rock Hill City Council voted last Wednesday to file a complaint against GT Real Estate that sent a strong message they would choose a different option than the one put forward by Tepper’s company.
The complaint claims Tepper’s GT Real Estate firm had “conflicting financial demands” by wanting more public investment but refusing to backstop the bonds in case the project went south. The city says GT Real Estate wanted $225 million in bond proceeds but was only willing to contribute $500 million in private investments.
The full complaint can be read here.
The city is seeking a jury trial and is demanding actual damages of $20 million, compensatory and punitive damages, and rights to the property now controlled by GTRE.
On Tuesday, a WBTV Investigation raised questions about whether the project was doomed from the start. The investigation found the amount of bond money agreed to by Rock Hill was far more public investment than other similar projects and simultaneously sidestepped key oversight steps.
Despite the concerns outlined by the City of Rock Hill in their own complaint, the city still signed an agreement after more than eight months of trying and failing to get the vital material it needed from GT Real Estate to issue the bonds.
In response to WBTV’s report a spokesperson for Rock Hill wrote in an email ““The City Council is looking forward eagerly to the day judgment is rendered on the facts that will be presented in court.”
FULL STATEMENT FROM GTRE:
“GTRE filed an amended Plan of Reorganization today to address the reactions of stakeholders to the original plan filed in August. GTRE’s original Plan of Reorganization would have paved the way for all creditors, including the City and County, to receive generous payouts on an expedited basis. Trade creditors have engaged constructively with GTRE, and their treatment under the amended Plan of Reorganization remains unchanged. Unfortunately, the City and County have instead chosen to pursue a flawed litigation strategy, making exorbitant and unreasonable demands well in excess of their entitlements. Under the amended Plan of Reorganization, the City and the County are treated similarly in accordance with their rights under the Bankruptcy Code and without the concessions that had been provided previously. These modifications are intended to prevent the City and County from causing further harm to the confirmation process and delaying payment of the $60.5 million that has been reserved to pay trade creditors.”
On Wednesday, York County issued the following statement:
“Late Tuesday, September 13th, GT Real Estate LLC filed a modified Plan of Reorganization in the Delaware Bankruptcy Court. The County is still reviewing the modified plan. However, it is self-evident the modified plan is yet another example of broken promises from these Tepper entities. To date, the Debtor in its public pleadings, and others have made repeated assurances that the misappropriated $21 million of York County taxpayer money would be repaid. York County is disappointed these parties again appear to be going back on their word. To be clear, the County has not engaged in any unreasonable conduct in regard to the Debtor. Rather, the County has only sought reasonable compensation for its real and legitimate claims and the damages GT Real Estate and the other Tepper entities have left in their wake. The County will continue to pursue its claims and aggressively protect its interests and the interests of its citizens and taxpayers.”
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