Developer fends off another offer for PAA

Revised plan would pay creditors in full

The bankrupt Pittsburgh Athletic Association filed an amended reorganization plan Tuesday that resolves objections made to the original proposal and that continues to allow for paying unsecured creditors’ claims in full.

The centerpiece of the plan remains the sale of the PAA’s iconic clubhouse on Fifth Avenue in Oakland to Shadyside-based developer Walnut Capital, proceeds of which would be used to repay creditors.

Terms of the sale include setting aside refurbished space in the building for PAA activities, while Walnut would redevelop the rest of the structure into offices and retail space.

The terms are essentially unchanged from the original proposal, except that the club would give up a proposed 5 percent interest in the building in exchange for upfront money that would be added to a reserve fund to pay potential taxes on the sale of the clubhouse, the PAA’s bankruptcy attorney, Jordan Blask of Tucker Arensberg, said during a status hearing in U.S. Bankruptcy Court on Tuesday.

The IRS and Pennsylvania Department of Revenue had objected to the first reorganization plan because it did not account for the potential tax liabilities.

Until last week, the revised plan called for reducing the payout to unsecured creditors to between 80 cents and 90 cents on the dollar in order to bolster the tax reserve fund, Mr. Blask said.

But last week, the club received another offer to buy the clubhouse from Downtown-based developer McKnight Realty Partners that would have paid unsecured creditors in full and provide a similar amenity package for Pittsburgh Athletic Association members, Mr. Blask said. McKnight was one of 10 original bidders for the clubhouse.

In response, Walnut Capital