NJMP files Chapter 11

[Phokaioglaukos]

One of my bankruptcy partners pulled up some of the documents filed with the court.

The certification in support of the motion for a cash collateral order filed at the same time as the case states that the senior secured lender (Merill Lynch Mortgage Capital Inc. has agreed to allow the use of the cash that is collateral for its loans for about four weeks. The cash is needed to pay the Millville Rescue Squad, insurance and other essential services. The certification also states that the debtors have worked with the lender to restructure the loans--$10 million of the $30 million in mortgage debt would be reclassified as unsecured debt and some of the current investors would invest $2 million in new equity for a post-reorg stake of about 75% with the senior lender getting just under 20%. There would be set aside $368,000 for the unsecured creiditors, not including the $10 million of debt newly classified as unsecured debt due to the senior lender. That is expected to allow seamless operation through the racing season and lead to a quick and cooperative resolution of the bankruptcy case.

There is also a series of three term sheets for the debt restructuring that go into greater detail. The current equity is zeroed out, but that does not apply to membership "interests" which are not equity in the debtors. What membership interests are is more of a license that will either be assumed or rejected by the debtors. I did not see anything in the term sheets about the members, but I expect that there will be no change. Membership will continue to mean the right to pay a blacktop fee to drive during a member day and rent suites at a discounted rate.