Grubb & Ellis Co., a U.S. real estate services company, filed for bankruptcy protection and agreed to sell almost all its assets to BGC Partners Inc.
The company yesterday listed $150 million in assets and $167 million in debt in a Chapter 11 filing in U.S. Bankruptcy Court in New York. The company said it completed about 12,000 sale and lease transactions last year and manages more than 250 million square feet of property.
“We determined that a partnership with BGC provides the best platform for our brokerage professionals, employees and clients,” Thomas P. D’Arcy, chief executive officer of Grubb & Ellis, said yesterday in a statement. “We expect no disruption to the company’s operations.”
The Santa Ana, California-based company said the downturn in the U.S. real estate market from 2007 to 2009 caused losses during the period that severely strained its liquidity and hampered its ability to keep operating, according to a court filing. Grubb & Ellis failed to find a buyer outside the bankruptcy process, Chief Financial Officer Michael Rispoli said in the filing.
BGC Partners, a New York-based broker of financial products, agreed to provide a loan of as much as $4.8 million to Grubb & Ellis to keep it operating during the bankruptcy process, Rispoli said.
“This transaction reflects the deep and unwavering commitment” of BGC “ to build a premier position in real estate services” and “ enable Grubb & Ellis to thrive and grow as part of the BGC family of companies,” BGC Chairman Howard W. Lutnick said today in a statement. Lutnick also is chairman of Cantor Fitzgerald LP and the chief executive officer of both companies.
Among Grubb & Ellis’s largest unsecured creditors listed in court papers was U.S. Bank N.A. Corporate Trust Services, trustee for holders of $32.1 million in 7.95 percent convertible senior notes due in 2015.
The company is asking a judge to set a March 9 deadline for preliminary bids in a formal auction tentatively scheduled for March 21.
The case is In re Grubb & Ellis Co., 1:12-bk-10685, U.S. Bankruptcy Court, Southern District of New York (Manhattan).