{"id":1004036799,"date":"2012-02-23T05:24:08","date_gmt":"2012-02-23T13:24:08","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004036799"},"modified":"2022-12-08T18:24:58","modified_gmt":"2022-12-09T02:24:58","slug":"as-grubb-ellis-chapter-11-begins-questions-abound-2","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/as-grubb-ellis-chapter-11-begins-questions-abound-2\/","title":{"rendered":"As Grubb & Ellis Chapter 11 Begins, Questions Abound"},"content":{"rendered":"

February 23, 2012<\/strong>
\nBy Scott Baltic, Contributing Editor<\/em>
\n\"\"<\/a><\/p>\n

Though the sale of Grubb & Ellis Inc. to BGC Partners Inc. and Grubb\u2019s bankruptcy filing on Monday bring a harsh clarity to the troubled company\u2019s recent travails, it might be a mistake to assume that we can now, finally, see where the situation is heading.<\/p>\n

An individual who\u2019s familiar with Grubb & Ellis, and who spoke with Commercial Property Executive<\/em> on condition of anonymity, characterized the bankruptcy as \u201ca really rushed filing\u201d and said that during a Tuesday afternoon hearing the judge at the U.S. Bankruptcy Court for the Southern District of New York<\/a> was openly unhappy with the structure that was proposed.<\/p>\n

According to the latest information available online, the meeting of creditors pursuant to Section 341 of the bankruptcy code has not yet been set.<\/p>\n

Much hinges on the course of Grubb\u2019s Chapter 11, the source suggested. If it mostly goes smoothly, BGC will have nailed down a great deal for its $25 million. But if pulling the bankruptcy together were to drag on well beyond the 30 to 45 days being mentioned as a time frame, the source wouldn\u2019t be shocked to see BGC walk, rather than keep shelling out debtor-in-possession funding.<\/p>\n

\u201cThe deal is not done,\u201d the source concluded.<\/p>\n

That\u2019s not to say that there\u2019s a rosy outcome anywhere on the horizon for Grubb & Ellis. \u201cThe company cannot sustain itself,\u201d the source said. \u201cThey\u2019ve been all but insolvent for a year or more.\u201d<\/p>\n

And it\u2019s been getting worse. In the past couple of months, Microsoft Corp. reportedly ended its property management<\/a> relationship with Grubb & Ellis, which will cost the latter about $40 million a year in income. Grubb also lost Kraft Foods Inc. as a property-management client in about the same time frame.<\/p>\n

Grubb & Ellis boilerplate currently claims that company has \u201cmore than 3,000 professionals\u201d on staff, roughly half the number cited not too long ago. That compares with about 4,000 for BGC Partners itself and more than 7,000 for Newmark Knight Frank, which BGC also owns.<\/p>\n

Assuming the bankruptcy goes forward and the sale stands, the source expects that Grubb & Ellis staff will be cut further and offices will be closed, including a number of offices that have been unprofitable for years. \u201cYou\u2019re going to see a lot of people go.\u201d<\/p>\n

Yet another wrinkle: Any commissions that were earned by Grubb & Ellis brokers, but were unpaid as of the Chapter 11 filing, are presumably now unsecured debts. The source suggested that BGC, which would have to approve payment of any unsecured debts, might pay brokers only if they contractually committed to stay with the company. Outside brokers who are owed commissions are likely just out of luck.<\/p>\n

Check back with CPE<\/em> <\/a>for more on this situation as it develops.<\/p>\n

# # #<\/p>\n","protected":false},"excerpt":{"rendered":"

Though the sale of Grubb & Ellis Inc. to BGC Partners Inc. and Grubb\u2019s bankruptcy filing on Monday bring a harsh clarity to the troubled company\u2019s recent travails, it might be a mistake to assume that we can now, finally, see where the situation is heading.<\/p>\n","protected":false},"author":1201,"featured_media":1004038935,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21781,21808,21825,21742],"tags":[],"class_list":["post-1004036799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-real-estate","category-featured","category-finance","category-latest"],"acf":[],"yoast_head":"\nAs Grubb & Ellis Chapter 11 Begins, Questions Abound - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/as-grubb-ellis-chapter-11-begins-questions-abound-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"As Grubb & Ellis Chapter 11 Begins, Questions Abound\" \/>\n<meta property=\"og:description\" content=\"Though the sale of Grubb & Ellis Inc. to BGC Partners Inc. and Grubb\u2019s bankruptcy filing on Monday bring a harsh clarity to the troubled company\u2019s recent travails, it might be a mistake to assume that we can now, finally, see where the situation is heading.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/as-grubb-ellis-chapter-11-begins-questions-abound-2\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2012-02-23T13:24:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T02:24:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2012\/02\/022312-BGC-Grubb-Logos.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"480\" \/>\n\t<meta property=\"og:image:height\" content=\"270\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Nicholas Ziegler\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/as-grubb-ellis-chapter-11-begins-questions-abound-2\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/as-grubb-ellis-chapter-11-begins-questions-abound-2\/\",\"name\":\"As Grubb & Ellis Chapter 11 Begins, Questions Abound - 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