Utah 7000 LLC, the owner of a 7,224-acre community in Summit County called Promontory, has won court permission to borrow as much as $25 million from Pivotal Financing LLC, over the objections of a Credit Suisse Group unit. Pivotal's loan would be paid before all other claims, including $313 million owed to a group of lenders, led by Credit Suisse's Cayman Islands Branch, that previously had highest priority.
Credit Suisse objected that its claims wouldn't be sufficiently protected by collateral if Pivotal was the first to be paid. To demonstrate that, the bank argued that Utah 7000's assets should be evaluated as if the developer were in liquidation.
Park City-based Utah 7000 filed for protection from creditors under Chapter 11 of the bankruptcy code, which typically means a company plans to reorganize, not liquidate.
U.S. Bankruptcy Judge Judith A. Boulden said in an opinion that Utah 7000's property was worth $560.1 million, based on a recent appraisal. Boulden concluded that the company's assets provide ample assurance of repayment for secured creditors holding $431.5 million.