Grubb & Ellis Bankruptcy Sale On Hold ?

A group of unsecured creditors is seeking to block Grubb & Ellis Co.’s proposed sale to BGC Partners Inc. for $30 million.

A group of unsecured creditors is seeking to block or at least delay commercial real estate brokerage Grubb & Ellis Co.’s   proposed bankruptcy sale to New York’sBGC Partners Inc.    for $30 million, claiming prospective bidders won’t have enough time to submit competing bids to drive up the company’s sale price.

The group is taking issue with the fast-track proposal by Santa Ana-based Grubb & Ellis, which filed for Chapter 11 bankruptcy protection Feb. 20 and proposed selling itself at auction to New York’s BGC Partners Inc. for $30 million.

Grubb & Ellis sought court approval to set a Feb. 27 deadline to object to the bidding procedures, with a hearing just two days later, a March 9 deadline to submit preliminary bid documents and closing on the brokerage’s sale by April 7.

That schedule has already been thrown into question, as the U.S. Bankruptcy Court for the Southern District of New York is not slated to hold a hearing on the bidding procedures until March 5.

The unsecured bidders claim that just is not enough time for companies to learn about, study, and consider submitting bids to acquire the firm. What’s more, they say, Grubb & Ellis has not yet disclosed all of its real estate holdings and assets, essentially leaving companies to submit blind bids for the company without knowing what they’re buying.

Among them is Zazove Associates LLC, a Nevada convertible securities manager that holds $12.1 million in convertible bonds issued by Grubb & Ellis not due until May 2015. Zazove filed its own objections to the bankruptcy proceedings as well as being part of the Official Committee of Unsecured Creditors. Unlike secured creditors, unsecured creditors are not guaranteed to be repaid as part of any bankruptcy sale. (credit to daniel j, sernovitz)

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