Rubicon US REIT reports $301,000 net income in April

Rubicon US REIT Inc., which seeks to stop noteholders from taking over through confirmation of their reorganization plan, filed an operating report for April showing net income of $301,000 on operating revenue of $4.57 million.

The Chicago-based real estate investment trust's operating income in the month was $3.16 million. Its interest expense was $1.9 million.

A pivotal hearing is scheduled to begin June 2 where noteholders want the judge to approve their plan with a confirmation order. Rubicon contends there is a higher offer of $405 million which the noteholders didn't disclose. The noteholders blame the lack of disclosure on Rubicon.

At the June 2 hearing, Rubicon also will argue in favor of its own motion to slow up confirmation by appointing a Chapter 11 trustee. The company says all directors are resigning on account of what they say are threats from the noteholders.

The disclosure statement for the noteholders' plan projects that they will recover 68.7 percent by exchanging the notes for all the new common stock plus a $50 million note. The plan would reinstate $311 million in mortgages while extinguishing existing common stock. Unsecured creditors, owed $1 million, would be paid in full.

The Class A preferred equity would remain in place under the plan. Class B equity holders may receive $100,000 in cash, although only for supporting the plan.

Noteholders filed a motion to end exclusivity when the Chapter 11 case was less than three weeks old. The noteholders said they wanted a plan of their own so they wouldn't be cashed out involuntarily in a sale they believed Rubicon was planning.

The Chapter 11 filing in January by Rubicon and affiliates came more than a year after the bankruptcy of the Australian parent Allco Finance Group. Rubicon was required by the parent's liquidator to attempt to sell the assets. Both assets and debt exceed $100 million, according to court papers.

The case is In re Rubicon US REIT Inc., 10-10160, U.S. Bankruptcy Court, District of Delaware (Wilmington).