Builder Charles Rutenberg submitted a bankruptcy reorganization plan Monday that calls for his biggest creditors to be paid less than half of what they are owed.
Smaller creditors would be paid 50 percent of what they are owed and Rutenberg's family members and others he owes money might get nothing at all.
It would be years before most creditors saw their money, and the amount paid to the biggest creditors would depend on what happens to the value of Rutenberg's interests in certain real estate holdings.
Nonetheless, "we've talked to some of the larger (creditors) and they are willing to go along with it," said Charles "Chuck" Tatelbaum, Rutenberg's attorney. "It's certainly more than they would get under any other scenario."
Rutenberg, for years one of the area's biggest home builders and developers, filed for Chapter 11 protection from his creditors in February, listing almost $40-million in debts and about $1-million in assets.
Before his financial problems, Rutenberg was one of the Tampa Bay area's biggest and most respected builders. By himself or through partnerships, he has built more than 125,000 homes nationwide, including more than 10,000 in the Tampa Bay area.
Under the plan submitted Monday, Rutenberg would contribute funds from 34 different sources _ including assets that Rutenberg has previously claimed as exempt from creditors _ to a trust that would later disburse the funds to creditors.
According to Tatelbaum, here's where the funds would come from:
Rutenberg would give the trust a personal promissory note for $300,000, payable over the next five years. The money would come from income Rutenberg earns from his home building company and other interests.
Rutenberg would transfer to the trust $400,000 in promissory notes that are owed to him or real estate partnerships to which he belongs.
He also would transfer his partnership interests in numerous commercial and residential developments to the trust. Tatelbaum said no value has been placed on those interests.
Cash totaling $122,000 would come from outside sources, which Tatelbaum declined to name.
A total value has not been placed on the trust because much of it includes interests in real estate that are expected to increase in value over time.
"We hope that the trustee will not run and sell the assets now, but hold them for a reasonable amount of time until they can increase in value," he said.
Tatelbaum said he hopes the plan will be approved by the U.S. Bankruptcy Court by as early as August.
While Tatelbaum said some of Rutenberg's larger creditors have tentatively agreed to the concept of the plan, others may not be as easy to convince.
Rutenberg's biggest creditor, Barnett Bank of Pinellas County, earlier this year accused the builder of hiding millions of dollars in assets from creditors, and unsuccessfully tried to get a bankruptcy judge to dismiss the Chapter 11 case because of it.
Rutenberg has vehemently denied the accusations, while at the same time accusing Barnett of forcing him into Chapter 11.
Barnett attorneys who are familiar with the case could not be reached for comment Monday. Tatelbaum said he had talked with Barnett representatives about the plan, but he declined to discuss their response to it.
Rutenberg, 69, also could not be reached for comment Monday.