Inacessible Records Hold Up Reorganization of Pepco Inc

Article excerpt

The progress of the reorganization of Norman-based Pepco Inc. has been stalled by inaccessible records held by former Chief Executive Officer Patrick E. Powers and determination of ownership of the more than 60 partnerships, according to Pepco Trustee Carl Pojezny.

However, things are beginning to change and Pojezny is moving closer to proposing a Chapter 11 plan of reorganization. On Monday, he would not speculate a definite date for filing the plan, but, Pojezny said ownership reports should be completed within 30 days and a real estate appraiser has begun to evaluate the properties involved in the bankruptcy case.

"The highest priority is to determine ownership, a complete evaluation of properties, and combine the two for a reorganization plan that makes sense for all," Pojezny said.

Pepco partnership holdings include 900 acres of raw land in Oklahoma and Cleveland counties, office buildings, apartment complexes and shopping centers. The majority of income producing properties are in Oklahoma City, Norman and Tulsa.

Partnership agreements filed with the Oklahoma Department of Securities show a different owner of some properties than what are shown on the ownership assignment records kept by Pepco.

Consequently, creditors are receiving notices required by the bankruptcy court in duplication because as an investor in one partnership, they were a part of assignments made to other partnerships.

Those investors purchased an interest in partnerships that later purchased an interest in income-producing properties, rather than buying new real estate.

Pojezny began in January to place the income producing partnerships, labeled tier one, into Chapter 11 bankruptcy. The last of the 21 properties are expected to be filed upon by the end of the week. They will all be proposed for administrative consolidation.

"During the last 60 days, a lot has been accomplished, considering the filing of bankruptcy against 21 partnerships," Pojezny said.

"Because of all the partnerships, they are placed in multi-district litigation to keep everything straight," explained William Federman, attorney for the trustee.

"There has been no pressure to put the investor partnerships in bankruptcy," Pojezny said.

Pojezny prioritized the properties for Howard Sears, who is doing the appraisal, requesting that he first evaluate questionable properties they would consider liquidating.

"The ones we propose to keep will be determined when he gets through. We want to be as fair as we can to make a determination," Pojezny said.

Sears will determine which of the properties could be sold and which would be feasible to the estate. …