More discouraging news from the Standard-Examiner, concerning River Project "moneyman" Gadi Leshem's Cover-All, Inc. Chapter 11 bankruptcy matter. Ace Reporter Schwebke reports this morning that Mr. Leshem has filed a declaration with the Bankruptcy Court, announcing his intention to shut down most of his national operation:
OGDEN — A financially troubled California carpet-installation company owned by local developer Gadi Leshem is closing nearly all of its facilities — including one in Ogden.In an earlier article, we speculated that Mr. Leshem might be preparing the way for a straight Chapter 7 style liquidation:
Bankruptcy records from Leshem on behalf of Cover-All Inc. indicate the company plans to maintain only two of its 23 facilities nationwide.
“It is the debtor’s intention to keep only its Las Vegas and Chatsworth (Calif.) facilities open,” Leshem wrote in a declaration filed last week in U.S. Bankruptcy Court for the Central District of California.
Could it be, gentle readers, that Mr. Leshem contemplates converting his Chapter 11 Reorganization into a straight Chapter 7 Liquidation, thereby allowing Mr. Leshem to jettison his floundering floor company, and then apply his energy full-time as a real estate developer? There's plenty of big money to be made by Gadi and his purported investor "partners," provided they have the financial juice to weather the current recession and move their project(s) forward. Enough money, we suspect, for Gadi to satisfy his obligations to his most pesky and formidable creditors, the State of California and the IRS, and to put a little dough in his own pocket. The rest of his creditors he can probably throw overboard via a Cover-All, Inc. Chapter 7.On the basis of the new information provided by Mr. Schwebke this morning, this appears to be exactly where Mr. Leshem's erstwile Chapter 11 "Reorganization" is now headed. As of now, his bankruptcy prodeeding is looking more like a straight Chapter 7 "Liquidation." Expect a formal motion for a Chapter 7 "conversion" very soon.
And for those lumpencitizens anxiously awaiting some palpable action on the languishing River Project, it would probably be advisable to not hold your breath. By folding up the bulk of his national operation, Leshem will obviously be deprived of much of that revenue stream that he milked from his Cover-All business for the past several years, in order to acquire his fifty or so Ogden River Project properties.
As for the pool of mysterious un-named investors who now represent Leshem's River Project investment capital fall-back position, Leshem has already hinted that his River Project development timeline may very well be measured not in months, but years:
Overall market conditions, including the softening of the real estate market in recent months, will probably have some effect on the pace of our partners’ development progress,” he said in the statement. “Because we are still quite early in what we have always described as a multiyear process, the actual impact of the current slowdown may be relatively minor. It is quite possible that market conditions, along with investor and consumer confidence, may have strengthened substantially by the time we are further along in our plans.Chalk it up as "another fine mess" that the visionary Boss Godfrey's "gotten us in."
If you enjoyed that Junction Dirt-pile which remained untouched and idle in the heart of Ogden's downtown, for the better part of 44 months during Boss Godfrey's second mayoral term...
Expect more of the same.
The world blogsphere is stting on the edge of its seat, awaiting our gentle readers' ever-savvy comments on this latest news development
Have at it, O Gentle Ones.
