A judge has approved the bankruptcy reorganization plan for a group of car washes, restaurants, gas stations and convenience stores owned by Scottsdale-based Danny's Family Cos., and for its founder and CEO, Daniel "Danny" Hendon.
According to documents filed in U.S. Bankruptcy Court for the District of Arizona, Judge Eileen Hollowell approved the Chapter 11 reorganization plan on Friday.
The plan establishes a five-year schedule for the repayment of lenders, car-wash vendors and suppliers, and other creditors by 20 affiliate businesses of Danny's.
The judge's approval also settles Hendon's personal bankruptcy.
Under the approved plan, Hendon will be allowed to keep his Paradise Valley home, but for a period of five years, he is required to hand over a monthly amount the court has determined to be his disposable income.
Dennis Naughton, general counsel of Danny's Family Cos., said Hendon's former second home, in Corona Del Mar, Calif., had been repossessed by Hendon's mortgage lender.
The Danny's affiliates filed for Chapter 11 bankruptcy in February and March 2010.
Hendon submitted his own Chapter 11 petition to the court on July 25, listing more than $317 million in personal liabilities.
Those included a $250 million claim by the state related to a September 2009 lawsuit. A land-development firm in which Hendon was involved and the Arizona State Land Department filed cross-claims against each other over a 2007 state-trust-land deal gone bad in the Desert Ridge area.
In February 2010, four creditors filed lawsuits against Hendon, who also is a developer, along with his business partners and their various companies, claiming a total debt of more than $50 million.
Naughton said the rapid-fire legal action was part of a domino effect that had started after one lender, Milwaukee-based M&I Marshall & Ilsley Bank, filed a Maricopa County Superior Court complaint, claiming non-payment on a $13.8 million business loan.
Another, larger lawsuit was filed in March 2010 by Dallas-based Comerica Bank, contending that Hendon and 19 of his companies defaulted on a $40 million loan, with an outstanding balance of $24.7 million.
Representatives of Danny's, a major Arizona employer for more than 25 years counting more than 1,000 workers, have said the effects of Arizona's weak economy have hurt retail sales at its car-wash, gas-station and convenience-store operations.
Since filing for reorganization, Danny's has undergone restructuring to improve its profit-making ability and long-term outlook, Hendon said.
"When this process began, we made a commitment to our employees, our creditors and our community that we would make every possible effort to weather the storm," he said in a written statement.
"We have had to make some very difficult decisions over the past year and a half to honor that commitment."
Hendon described the bankruptcy experience as "humbling" but said he and the company were ready to put it behind them and get back to business.
"I am especially proud that Danny's is able to pay our car wash vendors and suppliers 100 percent of what is owed to them," he said.
by J. Craig Anderson The Arizona Republic Dec. 19, 2011 05:56 PM
Danny's Family Chapter 11 finalized
Reuters: Business News
National Commercial Real Estate News From CoStar Group
Latest stock market news from Wall Street - CNNMoney.com
- ► 2017 (81)
- ► 2016 (145)
- ► 2015 (146)
- ► 2014 (102)
- ► 2013 (395)
- ▼ 2012 (392)
- ► 2011 (704)