Loudoun opposes Erickson Retirement Communities' effort to exit bankruptcy
Sunday, April 11, 2010
The Loudoun County government is opposing Erickson Retirement Communities' effort to exit bankruptcy.
The county is arguing that Erickson's reorganization plan could prevent the local government from collecting property taxes of more than $511,413 and related charges of $1.2 million.
Erickson, a Baltimore-based developer of retirement campuses, manages 20 communities around the country, including Ashby Ponds in Ashburn. The company has been operating under bankruptcy protection since the fall, when it succumbed to a weak real estate market and heavy borrowing.
Erickson has been aiming to emerge from bankruptcy this month, before an investment firm's deal to buy the company for $365 million expires. In a court hearing last month, an attorney for Erickson said the company needed to close the sale by April 30.
In a court filing Friday, Loudoun said the company's reorganization plan does not reflect that the county is entitled to payment ahead of other creditors.
It appears that "the Debtors are seeking to impair the claims of, and avoid the taxes owed to, numerous localities, including the County," Loudoun said in its court filing.
The reorganization plan, a document that spells out how money will be distributed to creditors, gives Erickson "unfettered discretion" as to the treatment of Loudoun's claim, the county said.
The city of Overland Park and a county government in Kansas have recently raised similar objections. Overland Park alleged that Erickson is seeking to avoid taxes owed to numerous local authorities.
An Erickson spokesman did not respond to a request for comment.