Phoenix Bankruptcy

The timing of the Chapter 11 bankruptcy filing by Phoenix Realty & Development LLC of Hot Springs has raised concerns with the Office of the U.S. Trustee.

The filing in October came just hours after eviction papers were signed by a judge to remove Stephen Walker, the COO of a related Phoenix entity, from a house that belonged to Deltic Timber Corp. of El Dorado.

By filing the bankruptcy, of course, the eviction was stayed. At the time of the filing, an attorney for Deltic called the bankruptcy filing a sham. (Deltic and Walker later worked out an agreement that he would leave the house.)

Still, the trustee has asked that Phoenix’s Chapter 11 case be dismissed or converted to a Chapter 7 liquidation.

Phoenix’s “Chapter 11 bankruptcy filing appears to be strategically tied to the ongoing events in the state court” case, trustee Nancy J. Gargula said in a motion filed in U.S. Bankruptcy Court. “Rather than a reorganization attempt, the bankruptcy filing basically brings a two-party civil suit into the bankruptcy arena.”

Gargula also said Phoenix hasn’t filed the necessary paperwork to move the reorganization forward anyway.

She has asked that Phoenix be ordered to pay a minimum of $325 for each quarterly period until the case is converted to Chapter 7 or dismissed.

If you recall, Phoenix Realty is a related company of Phoenix Renewable Energy, which broke ground in August 2009 on a $110 million wood pellet facility in Camden that never got off the ground.

We didn’t hear back from Walker, Sam Anderson, the CEO of Phoenix Renewable, or Phoenix Realty’s bankruptcy attorney, Andi Davis of Hot Springs.