Marley Neck Industrial Park, which owes more than $20 million to its creditors, won approval Friday for an interim spending plan from a U.S. Bankruptcy Court judge in Baltimore.
Income will be divided between the park and its chief creditor, Barclays Bank PLC, on a monthly basis, according to a motion filed by the bank and by the owner of the Curtis Bay office-warehouse industrial park.
The park filed a bankruptcy petition under Chapter 11, allowing reorganization and payment of debts, on Wednesday.
Once the park emerges from bankruptcy, Arundel Industrial Park Inc., a Delaware subsidiary of Barclays, will assume ownership of the 101-acre park on Cabot Drive, said the bank's lawyer, John Martin Klein.
"It's the same sad story," said John A. Pirovano, principal for CC&F Anne Arundel Investment Co., which is the principal owner of the park.
The investment company, headquartered in Boston, was formed about March 1, 1987, to develop the park on the east side of Fort Smallwood Road. But the park, home to five companies, fell victim to the recession and ended up defaulting on a loan from Barclays, Mr. Pirovano said.
The bankruptcy petition filed Wednesday should not affect the industrial park's operations, said Brooke Schumm III, attorney for CC&F.
Liabilities were listed as $20,206,828.86, almost all of it owed to Barclays. Assets were not filed. Judge E. Stephen Derby is hearing the case.
The reorganization plan that was submitted was a joint effort. "It is a prepackaged plan that was agreed to by Barclays and the debtor, and we hope the case will emerge from bankruptcy in about 45 to 90 days," said Mr. Schumm, adding that the recession "basically slowed down the industrial park development and reduced the expected rental income from warehouse facilities."
According to court documents, one 205,666-square-foot building is fully occupied.
The other building, which has 152,496 square feet, has only a few thousand square feet vacant.
Four unsecured creditors, mostly utility companies whose bills weren't paid this month because of the bankruptcy filing, are owed about $4,000, said Mr. Klein.
"The rental income from the property is sufficient to pay these people in full," Mr. Klein said. Payments would be made after the bankruptcy proceedings.
Judge Derby granted Mr. Klein's request Friday to start seeking the unsecured creditors' acceptance of the reorganization plan worked out with Barclays.
The park's financial condition and reorganization plan will be discussed at a hearing scheduled for 4 p.m. April 26.