Atlanta apartment building owner seeks bankruptcy protection

Overseeing the Miles Properties reorganization is chief restructuring officer Ron Glass of financial advisory firm GlassRatner Advisory & Capital Group. Glass said he hopes to get court approval next week to continue business as usual.

"There probably are some 15,000 to 20,000 people living in these apartments who so far have had uninterrupted service," Glass said. "That will stop happening if we can't pay [employees], so hopefully we can continue" by getting court approval.

The 20 largest creditors in the case have claims worth more than $18 million. Wachovia Financial Services, the largest creditor, has a $10.5 million claim that includes an aircraft loan guaranty. Wachovia in October increased the amount of Miles Properties' cash flow required to be held in reserve, which affected the company's working capital.

Miles Properties has about 228 employees and manages about 9,000 units at 36 different apartment complexes, including 13 complexes in Georgia. It historically has sought out older, underperforming properties that were undervalued due to neglect, poor management or financial difficulties.

In explaining the bankruptcy, Glass cited the "dramatic slowdown" of the real estate industry due in part to low consumer confidence and tightened credit markets. Some apartment complexes will be turned over to lenders, others might have debt modified and some might be sold, he said.