Will Rock Hill accept Tepper’s $82 million offer in bankruptcy case? A hearing has been set
Rock Hill’s city council met in a special meeting Monday to discuss a pending lawsuit after one of Carolina Panthers owner David Tepper’s companies offered $82 million to resolve creditor claims tied to the team’s failed headquarters project.
GT Real Estate Holdings, LLC, which Tepper created specifically for the Rock Hill site, presented the offer Thursday and if approved by a judge and creditors, the plan would settle “allowable claims” made by contractors, York County and Rock Hill in the company’s bankruptcy lawsuit, according to court documents.
City council called the meeting Friday to “receive confidential legal advice related to a pending lawsuit,” according to the agenda. After meeting in executive session Monday afternoon for over an hour, the seven-member council did not take any action and city officials wouldn’t share what had been discussed.
The city isn’t likely to announce its decision on GTRE’s proposal until next month.
A federal bankruptcy judge in Delaware will hold a hearing on Sept. 19 concerning GTRE’s recent proposal, according to a court filing Monday.
The proposal, if approved, would pay around $60 million to contractors connected to the failed project, according to a statement from GTRE. It also would pay York County around $21 million plus interest, and it would eventually give the city of Rock Hill $20 million, the statement said.
The hearing will be held for a judge to determine if the plan “is a reasonable exercise of the debtor’s business judgment and should be approved,” according to court documents filed Monday. It also will determine if the disclosure statement contains adequate information for the potential resolution to be considered by voting creditors, according to the filing.
Creditors cannot be solicited to approve the potential resolution until a federal bankruptcy court judge in Delaware approves it, according to the filing.
Rock Hill response to proposal
The proposal’s $82 million would come from one of Tepper’s other companies, DT Sports Holding, LLC, according to a statement from GTRE.
Although GTRE asserted that its plan was “a clear path to emerge from bankruptcy,” Rock Hill Mayor John Gettys was careful Thursday to make any declarations. He said the city’s legal team will need to look through the plan’s details before any decisions are made.
“We’ll do what’s in the best interest of the people of Rock Hill as we have throughout the process regardless of what is said out in public by other parties,” he said.
If the city accepts the plan, GTRE’s proposal would make $20 million available to Rock Hill from net proceeds (after clean-up and senior claims) of the sale of real property, the company said. The city has claimed it’s owed $20 million, court documents show.
Based on the company’s proposal, if Rock Hill does not accept the plan, it would instead receive an amount set in an agreement between the city and GTRE or an amount determined by the bankruptcy court, according to court documents.
GTRE halted construction in March on the Rock Hill site, which was expected to be completed in 2023. And in June, the company filed for bankruptcy after claiming Rock Hill failed to issue $225 million in bonds for the project.
The city has continued to assert, in statements and in court documents, that it was not required to issue the bonds as part of the deal.
Other Panthers project lawsuit
Rock Hill is in the midst of an additional lawsuit related to the Panthers site.
York County filed a lawsuit, unrelated to the bankruptcy case, in South Carolina federal court against three of Tepper companies and the city of Rock Hill. The lawsuit is pending.
The lawsuit alleges that Tepper’s companies — Appaloosa Management, Tepper Sports Holding and DT Sports Holding — misused $21 million of the county’s money, which was supposed to be spent on road improvements.
The county’s lawsuit also claims the city of Rock Hill breached a contract to issue bonds for the project.
Legal documents filed by the Tepper companies and the city of Rock Hill deny the allegations made by York County.
This story was originally published August 16, 2022 at 8:03 AM with the headline "Will Rock Hill accept Tepper’s $82 million offer in bankruptcy case? A hearing has been set."
