More than a dozen affiliates of Irvine-based apartment investor Bethany Group LLC filed for Chapter 11 bankruptcy protection Thursday.
The filings, made in the federal bankruptcy court in Santa Ana, are for several thousand apartments, in three portfolios of properties in Maryland and Texas.
Secured debt on the three portfolios totals about $400 million, according to lawyers representing Bethany Group.
Bethany Group counts seven portfolios of apartments in total, totaling an estimated 15,000 apartments. The other four portfolios aren’t included in the bankruptcy filing.
Bethany Group’s properties in Arizona,where some of the company’s biggest holdings are,have not filed for bankruptcy protection, the company’s lawyers said.
The company made a big splash in Arizona in mid-2007, snapping up 12 complexes and more than 5,000 apartments for a reported $428 million.
The deal, made near the peak of the market, was said to be the largest apartment acquisition in Arizona history.
Recent local reports in both Maryland and Arizona told stories of Bethany Group employees not being paid, utilities for complexes being turned off, tenant confusion, and mass layoffs at the company.
The filings today should allow the company to begin paying some of its bills again. Its lenders had been cutting off the company from money needed to pay expenses, Bethany’s lawyers said.
The filing would appear to be the largest bankruptcy related to an Orange County-based apartment owner since the market turned.
Smaller filings since late 2007 include those for Atherton-Newport Investments LLC and Real Estate Partners Inc., both of Irvine.
