As many of you know, DBSI hosted meetings with current DBSI TIC Investors with ownership interests in DBSI Master Lease or NNN Plus® Lease properties in Boise, ID during the week of December 15th. Many owners took advantage of this face-to-face meeting in which the agenda included many critical issues including:
• Q&A - Lease Alternatives (Amend, Assign, or Reject)
• Information on the Bidders for Amended Leases and Asset Managers
• Property Specific Concerns and Strategies
• Conversation with the Asset Managers
• General Q&A
As you also know, on December 19, 2008, DBSI filed with the Bankruptcy Court a request to approve comprehensive sale procedures that were formulated by DBSI in consultation with the Official Committee of Unsecured Creditors and its professionals. The hearing to consider approval of the sale procedures motion is scheduled for January 7, 2009. In order to facilitate the sale process, if approved, the hearing date for the pending motions to, among other things, reject the master leases has been pushed back to February 4th, 2009 (with a January 26, 2009 deadline for TIC Investors to opt out of the sales process and elect among certain alternatives described in the recent filing with the Bankruptcy Court).
Based on the positive feedback we received from the prior meetings, we have decided to host another round each day between January 12-16th, 2009(10am to 2pm or later as needed)in Boise. The meetings are intended to be informative providing TIC owners with a comprehensive overview of the various issues and explanation of the alternatives made available to the TIC Investors through the proposed sale process. The potential benefits of attending one of these meetings include:
• Your Lease Alternatives Explained
• Getting to Know the Companies Bidding for the Amended Leases
• Comprehensive Overview of Your Property and Short-Term Expectations
Simply put, we believe that your individual participation will allow your TIC ownership group to make a more informed collective decision regarding your Lease alternatives and your participation and role in the proposed sale process.
These meetings are intended for business representatives and not legal counsel. If you are represented by counsel, you should consult with your counsel before deciding to attend a meeting. Financial advisors to the Official Creditors' Committee and the chief restructuring officer of DBSI are invited and expected to attend.
Please indicate your preferred date with us by emailing us at Investorrequests@dbsi.com and reserve a day between January 12th – 16th, 2009. And, if for some reason these dates do not work for you, please email us a date and time for us to consider.
Tuesday, December 30, 2008
Monday, December 22, 2008
Amended Lease & Sales Procedure – Updated Dates – 12-22-08
This message is intended for TIC Owners not represented by Counsel and should not be read by TIC Owners who are represented.
On December 19th, 2008, DBSI, in consultation with the Official Committee of Unsecured Creditors, filed a motion seeking approval of comprehensive sale procedures pursuant to which DBSI intends to amend, assume and assign, sell, reject or otherwise dispose of each of the leases of a tenant-in-common properties for which it is a lessee or master lessee. These procedures have been carefully developed over a several-week period and developed with the considered input of the Committee and to address a number of concerns and comments raised by counsel for groups of TIC Investors, individual TIC Investors, counsel for certain TIC lenders and potential bidders on the assets. As noted in the sale procedures motion, various parties have expressed an interest in acquiring the leases (as amended or otherwise) and, if applicable, the related subleases, including, but not limited to, NAI Global Commercial Real Estate Services, Thompson National Properties LLC, GVA Advantis and other nationally-known real estate management companies. Discussions with these and other potential bidders will continue through the sale process.
A hearing to consider approval of the proposed sale procedures is currently scheduled for January 7, 2009 at 2:00 p.m. and, at that time, DBSI expects to pre-qualify certain of the potential bidders, several of whom may be well known to you, as Qualified Bidders that have already expressed interest in the assets for sale.
As a result of this proposed sale process, DBSI has adjourned the 3 pending motions seeking authority to reject master leases until February 4, 2009 at 10:00 a.m., and has extended the deadline to respond to those 3 pending rejection motions until 4:00 p.m. (ET) on January 12, 2009.
We encourage you to read the sale procedures at your earliest convenience as they contain a number of options that may be exercised by the TIC Investors with respect to their individual properties. A brief summary of the sale procedures and the options available to the TIC Investors is attached below this posting and is called "Sales Procedures".
Sales Procedures
On December 19th, 2008, DBSI, in consultation with the Official Committee of Unsecured Creditors, filed a motion seeking approval of comprehensive sale procedures pursuant to which DBSI intends to amend, assume and assign, sell, reject or otherwise dispose of each of the leases of a tenant-in-common properties for which it is a lessee or master lessee. These procedures have been carefully developed over a several-week period and developed with the considered input of the Committee and to address a number of concerns and comments raised by counsel for groups of TIC Investors, individual TIC Investors, counsel for certain TIC lenders and potential bidders on the assets. As noted in the sale procedures motion, various parties have expressed an interest in acquiring the leases (as amended or otherwise) and, if applicable, the related subleases, including, but not limited to, NAI Global Commercial Real Estate Services, Thompson National Properties LLC, GVA Advantis and other nationally-known real estate management companies. Discussions with these and other potential bidders will continue through the sale process.
A hearing to consider approval of the proposed sale procedures is currently scheduled for January 7, 2009 at 2:00 p.m. and, at that time, DBSI expects to pre-qualify certain of the potential bidders, several of whom may be well known to you, as Qualified Bidders that have already expressed interest in the assets for sale.
As a result of this proposed sale process, DBSI has adjourned the 3 pending motions seeking authority to reject master leases until February 4, 2009 at 10:00 a.m., and has extended the deadline to respond to those 3 pending rejection motions until 4:00 p.m. (ET) on January 12, 2009.
We encourage you to read the sale procedures at your earliest convenience as they contain a number of options that may be exercised by the TIC Investors with respect to their individual properties. A brief summary of the sale procedures and the options available to the TIC Investors is attached below this posting and is called "Sales Procedures".
Sales Procedures
Tuesday, December 9, 2008
Cash Collateral Update -12-09-08
Effective December 7, 2008, all properties have approved cash collateral orders. What does this mean to you? It means that where the funds are available, we can begin paying expenses on the properties under the direction of the court. Please note that up until a cash collateral order was in place, DBSI was not able to use property funds for any purpose, including maintaining the property. This inability to use those funds may have resulted in late payments to certain vendors, and in some cases, interruption of services.
Thursday, December 4, 2008
Important Dates for Lease Alternatives – 12-04-08
An update regarding the status of the Lease alternatives and new critical dates has been sent in the form of a letter to all attorneys representing Tenant-in-common (TIC) owners in DBSI Master Lease or NNN Plus® Lease properties on December 4th. This same letter is being sent directly to TIC owners not represented by any known Counsel no later than December 5th via email. These letters provide important information as to the revisions made to the Revised Amended and Restated Lease Agreement and critical dates for making your decisions. These critical dates are as follows:
December 8th – Comments to Amended Lease (from Counsel only)
December 23rd – TIC Owner / Property Group Lease decision sent to DBSI (Amend, Assign, Reject)
Group Leaders / Representatives: Please follow the directions outlined in the “Group Leader Instruction Sheet” to send in your groups Lease decision.
December 8th – Comments to Amended Lease (from Counsel only)
December 23rd – TIC Owner / Property Group Lease decision sent to DBSI (Amend, Assign, Reject)
Group Leaders / Representatives: Please follow the directions outlined in the “Group Leader Instruction Sheet” to send in your groups Lease decision.
New Hearing Date Set for Leases for Dec 30th – 12-04-08
On November 28, 2008, DBSI, Inc. and its affiliated chapter 11 debtors (collectively, “DBSI”) filed its Amended Notice of Revised Objection Deadline and Hearing Date [Docket No. 335] (the “Notice”). At the request of the Official Committee of Unsecured Creditors and numerous parties in interest, and to provide parties in interest with additional time to address the implications of DBSI’s motions to reject Masterleases and explore alternatives in connection therewith, DBSI adjourned the hearing on the First, Second and Third Rejection Motions [Docket Nos. 31, 63 and 88] to December 30, 2008 at 11:00 a.m. (ET) (the “Hearing”).
Because DBSI is prepared to proceed with rejection of all Masterleases and have “silo’d” the cash flow for each DBSI Masterlessee, DBSI is seeking Bankruptcy Court approval of the rejection of the Masterleases to be deemed effective as of:
* November 12, 2008 for Masterleases and Subleases identified on Exhibits 1-A through 1-D to the Notice (Masterleases and Subleases covered by First Rejection Motion);
* November 14, 2008 for Masterleases identified on Exhibit 2 to the Notice (Masterleases covered by Second Rejection Motion); and
* December 2, 2008 for Masterleases identified on Exhibits 3 or 4 to the Notice.
Notwithstanding the foregoing, in the interim period prior to the Hearing DBSI will continue to entertain the following alternatives to the rejection of a Masterlease:
* execution of an Administrative Waiver by the requisite representatives of the TIC Investors;
* execution of an Amended and Restated Lease Agreement; and
* execution of an Assumption and Assignment of Lease and Subleases.
A full copy of the Notice along with the Exhibits may be obtained on the website of the Debtors’ noticing and claims agent at www.kccllc.net/dbsi (click the link for “Court Documents” and then the link for the Notice).
DB02:7607478.1
067799.1001
Because DBSI is prepared to proceed with rejection of all Masterleases and have “silo’d” the cash flow for each DBSI Masterlessee, DBSI is seeking Bankruptcy Court approval of the rejection of the Masterleases to be deemed effective as of:
* November 12, 2008 for Masterleases and Subleases identified on Exhibits 1-A through 1-D to the Notice (Masterleases and Subleases covered by First Rejection Motion);
* November 14, 2008 for Masterleases identified on Exhibit 2 to the Notice (Masterleases covered by Second Rejection Motion); and
* December 2, 2008 for Masterleases identified on Exhibits 3 or 4 to the Notice.
Notwithstanding the foregoing, in the interim period prior to the Hearing DBSI will continue to entertain the following alternatives to the rejection of a Masterlease:
* execution of an Administrative Waiver by the requisite representatives of the TIC Investors;
* execution of an Amended and Restated Lease Agreement; and
* execution of an Assumption and Assignment of Lease and Subleases.
A full copy of the Notice along with the Exhibits may be obtained on the website of the Debtors’ noticing and claims agent at www.kccllc.net/dbsi (click the link for “Court Documents” and then the link for the Notice).
DB02:7607478.1
067799.1001
Friday, November 28, 2008
Delayed Hearing Notice - 11-28-2008
The following is an important message from Stephen Burr, counsel for DBSI, and is intended only for Tenant-in-Common owners who are not represented by counsel.
The attorneys representing groups of Tenant-in-Common owners (TICs) and the Creditors Committee have made it clear that they require more time to deal with the decisions which would otherwise have to be made by the TICs by December 2, 2008. In response to these requests, we have decided to change the subject matter of the December 2nd hearing, and defer the rejection/amendment/assignment Lease issue until a hearing now scheduled for December 30, 2008. We encourage you to continue the decision making process prior to December 2nd, particularly as to the waiver of administrative claim, as there is some risk that the Judge will not allow us the additional time. However, it seems likely that the Judge will grant our request. What we will be asking the Court to do the following on December 2nd:
1. As to properties that have special purpose entities as master lessees (i.e., not DBSI Housing or DBSI Master Leaseco) our request will simply be to delay the hearing until December 30th; and
2. As to the remaining properties that have DBSI Housing or DBSI Master Leaseco as master lessee, we will change our motion to a Nunc Pro Tunc motion (i.e. a motion to take an action effective as of a certain date but not operative until a subsequent hearing ).
The December 2nd hearing will remain on the schedule to deal with other pending issues. A formal notice regarding the December 2nd hearing and a list of changes should be available soon.
Depending on how the cash motions come out, we will make every effort to pay critical operating expenses and debt service in December to the extent of cash coming into the operating accounts on the individual properties.
The attorneys representing groups of Tenant-in-Common owners (TICs) and the Creditors Committee have made it clear that they require more time to deal with the decisions which would otherwise have to be made by the TICs by December 2, 2008. In response to these requests, we have decided to change the subject matter of the December 2nd hearing, and defer the rejection/amendment/assignment Lease issue until a hearing now scheduled for December 30, 2008. We encourage you to continue the decision making process prior to December 2nd, particularly as to the waiver of administrative claim, as there is some risk that the Judge will not allow us the additional time. However, it seems likely that the Judge will grant our request. What we will be asking the Court to do the following on December 2nd:
1. As to properties that have special purpose entities as master lessees (i.e., not DBSI Housing or DBSI Master Leaseco) our request will simply be to delay the hearing until December 30th; and
2. As to the remaining properties that have DBSI Housing or DBSI Master Leaseco as master lessee, we will change our motion to a Nunc Pro Tunc motion (i.e. a motion to take an action effective as of a certain date but not operative until a subsequent hearing ).
The December 2nd hearing will remain on the schedule to deal with other pending issues. A formal notice regarding the December 2nd hearing and a list of changes should be available soon.
Depending on how the cash motions come out, we will make every effort to pay critical operating expenses and debt service in December to the extent of cash coming into the operating accounts on the individual properties.
Tuesday, November 25, 2008
DBSI SharePoint Site Link -11-25-08
For property owners of Master Lease / NNN Plus Lease properties, here is a quick link to the general DBSI SharePoint site: http://asset.dbsi.com
Your user name, password and this link was sent to property owners via US mail.
Your user name, password and this link was sent to property owners via US mail.
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