Meruelo Maddux Properties Inc. on Monday named Matt Caverly its chief executive. He had been serving in that post on an interim basis.
Caverly has more than 20 years of experience in the real estate industry, and most recently led the acquisitions department at Hackman Capital in West L.A. He also is founder of 2120 Partners, a real estate consulting and investing firm.
Caverly’s appointment came as a creditors’ plan of reorganization went into effect.
“I am pleased to take the reins at this pivotal time,” Caverly said in a statement. “I want to thank our employees and our many partners who supported the company throughout this process. We look forward to moving ahead under the plan of reorganization.”
As part of the reorganization, MMPI Acquisition LLC acquired 55 percent of outstanding shares of the Los Angeles company, which is a significant owner of property in downtown Los Angeles. Non-insider shareholders received 35 cents per share in exchange for about 53 percent of their shares.
Founder and former chief executive Richard Meruelo, his management team and board resigned last month as part of the reorganization. Meruelo over two decades had built the company into downtown L.A.’s largest property owner, but the highly leveraged property landlord fell victim to the real estate downturn.
Meruelo Maddux filed for Chapter 11 bankruptcy more than two years ago. Two minority shareholders, Charlestown Capital Advisors LLC’s and Hartland Asset Management Corp. proposed the reorganization plan that was accepted by the bankruptcy court. To bankroll the deal, they brought in two investment firms, Global Asset Capital LLC of Palo Alto and Mount Kellett Capital Management LLP of New York, which invested $50 million to create MMPI Acquisition.
In the reorganization, Charlestown and Hartland retain roughly the same 5 percent stake they had before the bankruptcy.
About 88 million outstanding shares of MMPI common stock will eventually undergo a 5-to-1 reverse stock split. Caverly said that the company will likely be renamed in the near future.
Shares earlier closed up 2 cents, or 4 percent to 53 cents on the Pink Sheets.
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