Friday, July 23, 2010
Foreclosure Auction Put Off Again
By Dan Mayfield
Journal Staff Writer
The foreclosure auction of Albuquerque Studios has been put off, again.
A U.S. Bankruptcy Court judge in San Fernando, Calif., has canceled, for now, the auction that was scheduled to take place today in Albuquerque.
Since April, the bank Workers Realty Trust has threatened to foreclose on a delinquent loan of $24 million to the parent company of the studios, Pacifica Mesa Studios.
The judge ordered late Thursday that the issue be heard again on Aug. 16, said attorney Richard Burstein, who represents Pacifica Mesa in Los Angeles.
Pacifica Mesa Studios, filed for Chapter 11 bankruptcy protection on Tuesday, citing $105 million in debts on the studios. Chapter 11 allows the company to restructure its debt and stave off creditors until it can find a way to pay its bills.
At one time, Albuquerque Studios was the busiest movie studio in the state, hosting several high-profile films and big-name stars.
In court filings made Thursday, Pacifica CEO Hal Katersky said the company generated $10.5 million in income in 2008, and only $5.9 million in 2009.
The losses were due, "I believe to the poor economy and the significant decline in work and projects in the entertainment industry in general," Katersky said in the filing.
The court will hear today a request for immediate financing. Pacifica said it needs to have access to cash to keep the doors of Albuquerque Studios open. The employee's payday is today, and the company was seeking access to nearly $30,000 for payroll, overhead, utility expenses, and more, said Pacifica attorney Robyn Sokol.
The holder of a second, $80 million loan, Amalgamated Bank, pledged to offer $2.7 million in loans at a 12 percent interest rate in debtor-in-possession financing to keep the doors open. The judge in the case must approve the plan.
"Without this funding the debtor's (Pacifica) operations will come to a halt and Amalgamated will move to foreclose on its collateral," the bank said in a court filing.
Amalgamated will do everything it can to keep the doors open at the studios, said James Freel, senior vice president of Amalgamated.
"My goal here is to reorganize that debt and put the property on a solid financial footing," Freel said. "We want to support the facility, and we want to see it thrive. We don't want to see any damage in any shape or form to this property, and we want it to continue to be a success."