A federal bankruptcy judge has granted Arrow Trucking Co. bankruptcy trustee Patrick J. Malloy’s request to abandon Arrow’s former corporate offices and training facility in west Tulsa.
The offices, at 4230 S. Elwood Ave., and training facilities, at 3762 S. Jackson Ave., have been listed for sale at $3 million by Coldwell Banker Commercial since July.
“We never had an offer,” Malloy said. “Because the mortgage is for both properties, you have to sell them together. The problem with the office space is that it is a huge space. Not that many people would want it.”
Malloy said he sought an order from U.S. Bankruptcy Court Judge Dana L. Rasure to abandon the two properties to the mortgage holder, City National Bank of Phoenix, Ariz., because the mortgage principal and interest — $3,104,260 — exceeds the value of the property while maintenance costs continue to mount.
“You begin to incur risks of the pipes freezing, fire or vandalism,” Malloy said.
“There’s a lot of debt, and there’s just no equity.”
Tulsa County District Court Judge Rebecca B. Nightingale has approved the mortgage foreclosure motion of City National Bank, court officials said.
Jim Packard, an Oklahoma City property manager, has been appointed as receiver for the Arrow properties. Packard will oversee the properties until they are sold, court officials said.
Robert Campbell, the Oklahoma City lawyer who represents City National Bank, said the former Arrow properties will be sold in the near future.
“Absent other developments, the property is expected to sell at
a sheriff’s sale within 30 to 45 days,” Campbell said.
The sale of Arrow’s corporate offices and training center will be the last of the Arrow real estate to be disbursed.
In July, Malloy sold Arrow’s 26-acre maintenance facilities at 4241 S. Elwood Ave. to Miller Truck Lines of Stroud for $1.6 million.
The sale of the properties will be a milestone — but not near the end — of a saga that began Dec. 22, 2009, when Arrow’s lender canceled its fuel credit cards and refused to extend additional operating capital to the 61-year-old Tulsa flatbed carrier.
Arrow executives told employees at the company’s corporate offices to gather their belongings and go home. They notified Arrow drivers to return their trucks to the nearest Kenworth or Freightliner truck dealer, which many Arrow drivers were unable to do because they ran out of fuel.
Drivers — abandoned by the company three days before Christmas — dropped trucks and trailers at truck stops and rest areas from Bakersfield to Baltimore.
On Jan. 8, 2010, lawyers for Arrow filed a Chapter 7 bankruptcy liquidation petition in U.S. Bankruptcy Court for the Northern District of Oklahoma in Tulsa. With Arrow’s financial records in disarray, lawyers listed both the company’s assets and liabilities at between $100 million and $500 million.
After his appointment by the court as Arrow’s trustee, Malloy and a team of investigators and forensic accountants began unscrambling the company’s records.
Several weeks after they began, Malloy revised the initial asset and liability estimates to $8.55 million in assets and $98.97 million in liabilities.
In December, Rasure approved Malloy’s proposed distribution of $1.97 million in Arrow bankruptcy estate assets to 564 former employees who filed wage and employment law violation claims against the estate. The total is 58.7 percent of the $3.36 million in priority wage and employment law claims filed against the estate, court documents show.
The trustee is holding back about $1.5 million in bankruptcy estate assets to cover future claims that could be filed in the case, he said.
Abandoning Arrow’s former corporate offices and training center helped preserve the estate’s assets, Malloy said.
“The debtor (Arrow) owed $3.1 million” for the corporate offices and training center, Malloy said. “It is legitimate debt, and it is secured by the two properties. The bank will foreclose and liquidate the property, and if there is a deficiency, that claim will be a general unsecured claim (against Arrow) in the bankruptcy case.
“The odds of paying money to general unsecured creditors is very small.”
The end of the Arrow properties won’t signal the end of anything more than a phase in the bankruptcy case, court officials said.
With more than 1,485 legal documents filed in the case through Friday — and Malloy continuing to file claims against Arrow creditors and corporate insiders — the case could stretch on for years, officials said.