LB City Hall & Queen Mary Operator QSDI Reach Tentative Settlement Over Disputed Unpaid Rent/Rent Credits And Payment Of Sums To City In Bankruptcy Proceeding; Arrangement Is Subject To Bankruptcy Court Approval
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(Nov. 21, 2006, as breaking) -- LB City Hall has announced that it has "reached a tentative $9 million settlement with Queen’s Seaport Development, Inc. (QSDI), operator of the historic Queen Mary, over disputed rent credits and unpaid percentage rents."
In a release emailed to media outlets after the close of the business day, the release says:
The settlement, which must be approved by a federal bankruptcy court, would resolve the differences between the City of Long Beach and QSDI. Although there are other peripheral issues pending in the bankruptcy case, this settlement agreement would allow court-appointed Trustee Howard M. Ehrenberg to proceed with a sale of QSDI and its main asset, a long-term lease with the City to operate the Queen Mary.
"This agreement is an important benchmark between the City and QSDI, and we're hopeful the bankruptcy court can now move to expeditiously resolve any remaining issues and bring this matter to a close," Mayor Bob Foster said.
The tentative agreement provides the following:
$4.9 million priority cash payment to the City at the time of sale of QSDI during the bankruptcy proceedings. This cash payment will settle the City’s outstanding monetary claims from 2000 through December 31, 2005.
$4.1 million in an unsecured monetary claim, to be paid to the City after all general unsecured creditors are paid, but prior to any disbursements of sale proceeds to any equity owners.
All City attorney fees, accounting fees and consulting costs associated with the bankruptcy case, from September 1, 2006, through the completion of the sale of QSDI in bankruptcy court, will be added to the $4.9 million priority cash payment to the City.
The settlement agreement resolves any and all rent credit disputes that are alleged to have been applicable prior to December 31, 2005.
"We are now in a position to fully realize the potential of the Queen Mary and the surrounding site,” said Councilmember Suja Lowenthal, whose Second District includes the Queen Mary. "This agreement is an important first step in that process."
The City owns the Queen Mary, which is leased to QSDI under the terms of a ground lease. The ground lease also includes the approximately 45 acres of land surrounding the Queen Mary. The non-profit RMS Foundation runs the Queen Mary under a sublease from QSDI. QSDI filed for Chapter 11 bankruptcy protection in federal court on March 15, 2005."
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