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Liberty House U.S. Bankruptcy Judge Lloyd King today denied a proposal to seek mediation between parties in the Liberty House bankruptcy case, now 21/2 years old.
mediation
request denied
A U.S. bankruptcy judge refuses
to grant the proposal from the
retailer's owner, JMB RealtyStar-Bulletin staff
Liberty House owner JMB Corp. of Chicago had asked King to appoint a third-party mediator to help bridge the gap between JMB and prime creditors who widely disagree on the value of Liberty House.
Creditors led by Bank of America have estimated the value of Liberty House $190 million while JMB says it is worth closer to $285 million.
"It's very late in the day," said King in denying the JMB motion. "This case has been going on for a long time and the situation hasn't substantially changed," he said.
A hearing has been scheduled for Sept. 7 to consider the reorganization plan filed by the lenders last week. If approved by King, the plan will be sent back to creditors for a vote.
Attorneys for Liberty House objected to the mediation proposal, saying that three of the four parties in the case are already in agreement on a reorganization plan filed last week in bankruptcy court and that JMB has provend unwilling to back away from the position it took in earlier negotiations.
JMB's attorney, Dan Murray, said after today's hearing that while King did not require mediation, he did urge it and JMB hopes the parties will reconsider.
JMB believes the lenders have "grossly undervalued" Liberty House and JMB will present its own plan later this week to show that, Murray said. He said that if the parties don't get together beforehand, JMB is ready to argue its case in the Sept 7 hearing.
