Looks like October 27th is going to come and go.. Just like any other day. THP ReOrg

[administrator]

I really wish I was able to attend court yesterday.

11/13/2009 776 Objection to Motion to Extend/Limit Exclusivity Period filed by Debtor TH Properties Filed by Harleysville National Bank and Trust Company (related document(s) 682 ). (Attachments: # 1 Proposed Order # 2 Certificate of Service# 3 Service List) (BRESSLER, BARRY) (Entered: 11/13/2009)

11/13/2009 777 Objection to Motion to Extend/Limit Exclusivity Period filed by Debtor TH Properties Filed by National Penn Bank (related document(s) 682 ). (Attachments: # 1 Service List) (MCGOVERN, ELIZABETH) (Entered: 11/13/2009)

[administrator]

I have not had an opportunity to read through these yet.

This may create some large problems I would imagine.

[administrator]

Lots of interesting stuff in here.

15. Except for a development project known as “Coddington View,” the
Debtors have not performed any construction at any of the development projects serving
as collateral for the Harleysville Loans (excluding two or three remaining single homes at
completed projects). Harleysville is also not aware of any home sales in any of the
development projects serving as collateral for the Harleysville Loans occurring after the
Petition Date.

16. In support of the Motion, the Debtors note that they have obtained DIP
financing from Harleysville for the completion of ten homes at Coddington View, with an
option for fourteen additional homes. (Motion, ¶ 28.) While Harleysville has agreed to
provide DIP financing to the Debtors for the completion of ten homes at Coddington
View, Harleysville has not granted the Debtors an option for fourteen additional homes.
Rather, Harleysville has merely agreed to consider the possibility of providing additional
DIP financing for fourteen additional homes should the Debtors timely perform all of its
obligations under the current DIP loan with Harleysville.

[administrator]

24. Major obstacles will prevent the Debtors from reorganizing and an
extension of the exclusivity periods is unlikely to lead to a successful reorganization
within a reasonable period of time, and is fruitless. In the draft Plan filed by the Debtors,
the Debtors seek to fund a Plan almost exclusively through the buildout and sale of new
homes. As the Debtors have stated in their motion, the recession, the severe slump in the
housing market and the credit crises caused the Debtors to cease their operations in mid-
April. None of these causes of the Debtors’ turmoil have ceased to exist and the Debtors
have failed to explain how they intend to overcome these continued industry-wide
burdens. Moreover, as evidenced by the docket in these cases, the Debtors must
overcome zoning problems with various governmental authorities that are proving
expensive and litigious. Aside from having extremely limited financing to fund their
reorganization and no significant new home sales, the Debtors are also facing rapidly
declining values of their real property. The Debtors also only have a very limited number
of current employees, making it very difficult to sell homes, manage projects and
construct new homes. In light of these major obstacles, the Court should deny an
extension of the exclusivity periods.

26. Finally, denying exclusivity will facilitate the conclusion of these Chapter 11 cases. An end to the Debtors’ exclusivity periods will allow other parties-in-interest,such as Harleysville, to file their own proposed plans of reorganization that could provide
for a sooner disposition of the Debtors’ real property in a manner consistent with today’s
economic realities.

[administrator]

25. As they argued in the First Motion to Extend Exclusivity, the Debtors maintain
that the current Exclusivity Periods should be extended to allow them additional time to finish
negotiating a plan of reorganization with the Committee and their pre-petition lenders. In light
of the recent relief from stay motions filed against the Debtors and the incomplete and
unconfirmable Plan filed with this Court, it is clear that continued negotiations with their prepetition
lenders are futile, the Debtors’ proposed Plan is fatally flawed, and a further extension to
the Exclusivity Periods is unwarranted. As such, the Second Exclusivity Motion should be
denied.

[administrator]

34. Finally, the Plan is not feasible under §1129(a)(11) of the Bankruptcy Code. The
Plan assumes that houses will be sold on a rolling basis as construction is completed with excess
proceeds from each sale used to build out the next homes. At this same time, millions of dollars
will be paid out to the Tom and Tim Hedricks for salaries, overhead, management fees, and
bonuses and to professionals. To accomplish this, the National Penn claims gets sliced by over
$2,000,000 and all of the risk falls on National Penn that the Debtors’ assumptions are accurate.
Plans of reorganization premised on future sales of property absent a showing that such sales are
likely to occur within a specified timeframe and upon defined terms are insufficient to support a
finding that a plan is feasible under §1129(a)(11) of the Bankruptcy Code. In re Walker, 165
B.R. 994, 1005 (E.D.Va. 1994).

[B_robert]

All in all, some very interesting reads. The banks are coming out of the woodwork now and pooh-poohing the reorganization plan.

Honestly, who can blame them. This company has tried to roll over house sales for several months and in that time, they've sold, what three or four? How can you fund operations on the sale of three or four homes every six months?

[administrator]

...

I think it may be fair to say we are seeing a result of something from court yesterday at this point. But, no one knows for sure.

Wachovia was one of the banks that had a relief of stay hearing a I believe.

[administrator]

From wachovia :

24. The Debtors continue to be extremely troubled and appear to have no real
prospects for reorganization. Further extending the exclusivity periods will only result in further
delay by the Debtors.

[THProwler]

Here's a thought, is The Gay Davidson Group disclosing this to potential clients? After all, it is public record!

24. The Debtors continue to be extremely troubled and appear to have no real
prospects for reorganization. Further extending the exclusivity periods will only result in further
delay by the Debtors. However, allowing the exclusivity periods to expire will permit other
parties to file their own proposed plans of reorganization, which may provide for an efficient
disposition of the Debtors’ property in a manner actually consistent with the Bankruptcy Code.

Admin-I hope that you let us know when THP's office reads this! They are so pathetic!