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Yellow Bluff mum about bankruptcy

Letters go to 33 creditors concering Chapter 11

POSTED: February 9, 2009 10:31 a.m.
Yellow Bluff Development is tight-lipped about filing bankruptcy under Chapter 11 on Jan. 6, but the legal move may affect locals connected to the Midway corporation.
Representatives from the housing development, following the advice of its  Savannah-based attorney, James L. Drake Jr., declined to talk about the situation.
However, 33 letters were sent out Jan. 9 to all the businesses and individuals to whom the development owes money. The creditors can attend a Feb. 11 public meeting in the Savannah bankruptcy court.
“That’s where the creditor has the opportunity to question the offices of the debtor about the bankruptcy,” said Sam Kay, clerk of bankruptcy court for the Southern district. “The debtor has four months to get a plan of reorganization together and propose how they’ll pay their debtors.”
Kay said it is not uncommon to get an extension.
Regarding Yellow Bluff’s 20 largest unsecured claims to creditors, the corporation owes about $1.2 million, including $241,959 to Paul Krebs Construction.
The construction company on Airport Road is seeking an unliquidated, disputed lawsuit over its claim, according to bankruptcy court records. Paul Krebs is Yellow Bluff’s second-largest creditor.
 Kay said the lawsuit is contingent and no legal action can currently be taken other than bankruptcy court.
Filing Chapter 11 protects a corporation from creditors, allows it to keep assets and come up with a court-approved plan to reorganize.
Ailing carmakers Chrysler and GM considered the Chapter 11 option, which lets a company continue to operate, a few months ago before the $17.4 billion bailout.
Chapter 7 and 13 bankruptcy filings usually pertain only to private individuals and can mean releasing the debtor from liabilities and liquidating assets to pay creditors.
Out of the 2,591 bankruptcies filed at the Savannah bankruptcy court office last year, only 12 were Chapter 11, according to the Southern District bankruptcy court Web site.
Ren Keel, one of Yellow Bluff’s partners, served as the signing authority on the bankruptcy records.
 

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