Triad America Corp., Saudi Arabian financier Adnan Khashoggi's investment holding company, filed for reorganization Wednesday under Chapter 11 of the U.S. Bankruptcy Act, court officials said.
Court documents show the company owes creditors approximately $300 million.
The action was confirmed by Jesse Meeks, a clerk in U.S. Bankruptcy Court in Los Angeles, where papers were filed. The move came in the wake of numerous lawsuits filed against Triad by its creditors.
Puts Creditors on Hold
The filing effectively places all of Triad's creditors on hold while the bankruptcy court obtains a full accounting of Triad's remaining unmortgaged assets. A bankruptcy judge then will decide which of dozens of creditors has first claim on Triad's assets.
Under Chapter 11 reorganization, Triad will retain control of its assets while it works out a plan to repay creditors. The company has 120 days to file a reorganization plan with the court.
John Ashton, attorney for Triad in court proceedings with one of its largest creditors, Travelers Insurance Co., said he learned of the plans for Chapter 11 filing late Tuesday.
Travelers, which loaned Triad $61.5 million for construction on the Salt Lake International Center and the downtown Triad Center, was to appear at a hearing Friday in 3rd District Court. It was expected the Travelers officials would ask the court to appoint a receiver for the developed portions of Triad Center and some parts of the International Center.
Ashton said that proceeding, along with all others involving Triad America and its subsidiaries, will now be put on hold as the bankruptcy court assesses the company's financial situation.
"Now those proceedings go forward in bankruptcy court in Los Angeles, in terms of a plan," he said.
Triad spokesman Arthur Miller could not be reached for comment Wednesday.