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Seaboard Realty and its affiliates filed petitions with the U.S. Bankruptcy Court for the District of Delaware, seeking protection under Chapter 11 of the U.S. Bankruptcy Code.
All operations are expected to continue as normal throughout this process, the statement says.
The Chapter 11 filing includes Seaboard Realty and a number of affiliates it manages, which own the equity of subsidiaries that directly own the properties, but does not include the property-owning subsidiaries themselves.
Seaboard Realty is owned by John DiMenna, Thomas Kelly and William Merritt.
DiMenna reportedly agreed to resign voluntarily from having any managerial or decision-making role in each of the entities, thereby terminating his authority to represent or act for Seaboard Realty or any of its affiliates.
DiMenna actively managed the Seaboard operations as the managing member of Seaboard Realty and managed the properties owned by its affiliates through a property-management company owned solely by DiMenna.
Recent events caused Kelly and Merritt to reportedly become increasingly concerned that the operations and finances of the company were not as they had been represented to be by DiMenna, according to the release.
As a result, they hired advisers, including retaining Dechert LLP as counsel and directing the accounting firm of Anchin, Block and Anchin as forensic accountant.
In the last few days, Kelly and Merritt concluded that immediate additional steps needed to be taken to protect the value of the enterprise for all stakeholders, says the release.
Marc Beilinson of Beilinson Advisory Group was retained as chief restructuring officer and the owners are working on appointing an independent manager to join them on the board of the company and its subsidiaries.
As the investigation into the company's operations, accounting and financing continues, and after discussion with the various lenders to the enterprise, management will determine if or when Seaboard Realty affiliates that directly own Seaboard's properties should also file for bankruptcy.
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