Metrogate Ch. 11 Case Tossed, Creditors Chided By Judge

Law360, Wilmington (May 26, 2016, 4:45 PM EDT) -- An involuntary Chapter 11 bankruptcy case filed against residential real estate firm Metrogate LLC was dismissed Thursday by a Delaware bankruptcy judge, who accused the petitioning creditors of forum shopping their claims against the company.

In a written opinion, U.S. Bankruptcy Judge Kevin J. Carey said that the involuntary petitions were brought in bad faith by four investment funds that held preferred stock issued by Metrogate in 2005. The funds, managed by Taberna Preferred Funding, held $60 million in preferred stock under a pair of 2005 indenture agreements and say Metrogate stopped making payments on the obligations in 2009.

Metrogate restructured its debt...

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