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Grubb & Ellis Reaches Deal With Workers on 9/11 Lawsuits

Source: Dow Jones

Posted on 02 Jul 2012 by Neilson

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Grubb EllisGrubb & Ellis Co. is asking a bankruptcy judge to allow workers who were hurt during the cleanup of lower Manhattan after the Sept. 11, 2001, attacks to pursue their lawsuits against the company and seek damages from its insurers.

The commercial real estate broker is asking the judge to sign off on a deal reached with lawyers representing many victims in the cases, which were halted as a result of Grubb & Ellis's Chapter 11 filing.

The multiple lawsuits involve at least 490 victims who were involved in clearing debris after the attacks. Grubb & Ellis is named as a defendant in the cases where the plaintiffs suffered mainly respiratory injuries after the attack, outside the World Trade Center area or within the World Trade Center site.

If the agreement receives the approval of Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan, the victims would be able to recover damages from Grubb & Ellis's insurers, but not the estate.

"In an effort to avoid excessive litigation and to prevent undue delays and costs, the debtors have agreed to lift the automatic stay for the limited purpose of allowing the World Trade Center Litigation plaintiffs to pursue their claims only to the extent of available insurance," Grubb & Ellis said in court documents.

Grubb & Ellis hasn't filed a bankruptcy-exit plan yet, which details how the company plans to divvy up its estate among creditors and lenders.

The company sold its assets to BGC Partners Inc. (BGCP) earlier this year, in a deal that included some cash but was largely a debt for equity swap.

BGC Partners was the only bidder for Grubb & Ellis's assets and offered to forgive $30 million in debt to purchase the company. It later added $16 million in cash to the offer. BGC Partners has since combined Grubb & Ellis with another of commercial real estate company it owned and formed a new firm called Newark Grubb Knight Frank.

Grubb & Ellis filed for bankruptcy in February with the offer from BGC Partners in hand. The offer came after a year of marketing itself to potential buyers, as the maturity date of a $30 million loan loomed.

In late 2011, Grubb & Ellis lost a major property-management contract, straining cash to the point that it couldn't make it through the first quarter of 2012 unless a sale of its assets was executed, it said.

The Santa Ana, Calif., commercial real estate and property management company claimed $150 million in assets and $167 million in liabilities when it filed for bankruptcy.