Judge gives PAA more time to amend plan
Pittsburgh Post-Gazette
The judge overseeing the Pittsburgh Athletic Association’s bankruptcy case has given the club more time to resolve objections to its proposed reorganization plan.
The U.S. government filed an objection late last week, saying the plan does not account for an estimated $2 million in taxes the PAA likely will owe on the planned sale of its iconic clubhouse in Oakland.
The $11.9 million sale to Shadyside-based Walnut Capital is the centerpiece of the reorganization plan, which calls for using the proceeds to repay all creditors in full.
“We recognize the IRS has a claim,” the PAA’s bankruptcy attorney, Jordan Blask of Tucker Arensberg, told Judge Jeffrey A. Deller during a status conference Tuesday.
“We’ve spoken to stakeholders with respect to assisting us” in setting aside a reserve to pay the taxes, Mr. Blask said, adding that he expects the tax bill to be reduced substantially once the final figures are worked out.
Unsecuredcreditors and Walnut Capital would likely be among the stakeholders contributing.
Judge Deller gave the PAA 14 days to report back on its progress in preparing an amended plan that resolves the tax issue and another objection filed last week by the developers of a hotel being built on PAA property next to the clubhouse.
Mr. Blask had hoped to win bankruptcy court approval for the reorganization plan and complete the sale to Walnut Capital by late February, paving the way for creditors to be repaid.
“While we’re off track on the timing … the goals still remain reachable,” Mr. Blask told the court Tuesday.
Drowning in a sea of debt, the PAA filed for Chapter 11 bankruptcy protection in May.
Walnut Capital emerged in September as the winning bidder for the aging Fifth Avenue clubhouse, which the company plans to redevelop into offices and retail space, while setting aside some space for PAA activities.
In court Tuesday, Walnut Capital reiterated its commitment to buying the property. “Walnut Capital is firmly invested in this project,” the company’s attorney, David Rudov, said. “We have a big interest in making sure this building is restored to its original gran-