There was just the Chapter 7 bankruptcy of Marina City Associates, at one time the owner of all commercial property at Marina City.

The involuntary petition was filed in United States Bankruptcy Court for the Northern District of Illinois on November 18, 1988 and would not officially close until 12 years, four months, and nine days later on March 26, 2001.

At the same time, Marina City Associates was filing for bankruptcy in Texas, where it was a limited partnership. Ellison Trine Starnes, Jr. signed a voluntary petition for bankruptcy on April 6, 1988.

In a document filed in Cook County’s Circuit Court on March 14, 1988, an attorney for Continental Savings Association said Starnes did not dispute that Marina City generated insufficient income to cover operating costs or make needed repairs, let alone service the mortgage debt.

John Collen of Sonnenschein Nath & Rosenthal LLP, a Chicago law firm now known as SNR Denton, represented Marina City Associates, along with David A. Golin of Arnstein & Lehr LLP. The bankruptcy trustee was Ilene F. Goldstein, an attorney whose offices were located north of Chicago in Highland Park.

The case, number 88-17840, was assigned to Judge Jack B. Schmetterer, who was appointed to his first 14-year term in 1985 and his second 14-year term in 1999.

(Left) Collen, now partner with SmithAmundsen LLC, and Golin, now partner at Arnstein & Lehr LLP. (Right) Judge Schmetterer.

30 creditors had filed claims against Marina City Associates initially totaling $29,087,720.59 but after objections from Goldstein, the court disallowed some claims. Most notably, the claim by the Cook County tax collector for $7.3 million as a “priority” claim was allowed as a $900,000 claim secured by a lien against the property.

James M. Flanagan, the court-appointed receiver who managed the commercial property from November 23, 1987 until the bankruptcy, at which time Goldstein took over, filed a claim on February 6, 1989, for $327,403. The trustee filed an objection on October 13, 1995. It was disallowed on December 1, 1995 but on May 15, 1996, Goldstein was authorized to pay $69,000 to Flanagan and $60,000 to his attorney, Myron Kantor.

Other creditors included...

• AIC Security Systems Inc. (2 claims) – $110,668
• Abbott Industries Inc. – $3,465
• Air Canada – $4,165
• Anderson Lock Co. Ltd. – $296
• Controlled Systems Corp. – $1,166
• E & W Engineering Company (2 claims) – $495,740
• Fancy Colours & Co. – $327
• Hayes Boiler & Mechanical Inc. (2 claims) – $94,160
• James A. Regas – $125,823
• Madigan & Getzendanner – $90,000
• Marina City Venture Ltd. – $32,380
• Marina Towers Condominium Association – $397,040
• Marina Towers Garage Corp. – $60,000
• Nabiga Electric Supply Inc. – $1,322
• Premium Financial Services – $3,687
• Richmark Bank – $1,687,920
• Service Glass Company – $3,384
• Therm Flo Inc. – $9,540
• Travelers Of Illinois Sneckenberg & Thompson – $135,316
• W. R. Grace Dearborn Division – $346

When the first hearing started at 10:00 a.m. on September 23, 1994, Marina City Associates owed $24,466,101.36. That included $16,590,656.55 still owed to Continental Savings. The federal savings and loan association had given Starnes a mortgage on May 18, 1983 in the original amount of $12.7 million. Interest, attorneys’ fees, and other costs pushed the amount due to $23.5 million by November 21, 1990. Starnes had been in default on the mortgage as early as June 15, 1987.

(Above left) A Commonwealth Edison bill for one month of electric service at Marina City, dated June 2, 1988, in the amount of $142,999.52. If not paid by June 16, according to the bill, an additional $187.30 would be due. (Above right) A February 19, 1988 receipt from Illinois Bell for “payment made to restore service.” (Click on images to view larger versions.)

Commonwealth Edison was still owed close to $150,000, but in 1995 the claim was assigned to John L. Marks.

The wife and sons of Charles Swibel filed a claim on January 12, 1989, on behalf of Charles Swibel Insurance Trust, for $320,833. Later, $13,750 of this was allowed as an administrative expense.

There would be 90 hearings until the last one at 10:30 a.m. on April 10, 2001.

(Above) Among the attorneys filing appearances were (left to right) Darryl M. Bradford, formerly with Jenner & Block, who in 2010 was named Senior Vice President and General Counsel for Exelon Corporation in Chicago, and five men who by 2012 were all partners at Jenner & Block: David J. Bradford, Vincent E. Lazar, Ronald R. Peterson, Anton R. Valukas, and John F. Ward, Jr.

By January 10, 1994, settlement hearings were being scheduled. On November 15, 1994, a motion was filed for “entry of an order enforcing the court’s prior order authorizing sale free and clear...by trustee and Niki Development Corp,” referring to the sale of the property to John Marks. The motion was granted the next day, along with an order by the court that the county not sell the property to recover any real estate taxes.

The Bankruptcy Court decision was upheld on appeal. Filed on December 8, 1994 and assigned to U.S. District Court Judge Wayne R. Anderson, it was dismissed on March 8, 1995. Anderson (left) served as a U.S. District Judge for the Northern District of Illinois for 19 years and as a state court trial judge for seven years. He is now a mediator for a private alternative dispute resolution provider.

On August 7, 1995, the court started authorizing payments of lawyers’ fees. The first to get paid was Rosenthal & Schanfield, receiving $215,634. They would later be paid another $62,986 for work and expenses in 1995 and 1996. Coffield Ungaretti & Harris received $187,300 plus $13,284 in expenses.

On October 13, 1995, there were several motions to allow claims, either full or partial, or to deny claims – including a motion to allow the court to pay John Marks for the Com Ed bill that was transferred to him. On December 15, 1995, the first of these orders were signed.

A motion by Ilene F. Goldstein on March 21, 1996, for approval of a settlement with Marks and Marina Towers Condominium Association, was granted on April 9, 1996.

None of the creditors got more than a modest percentage of their claim. Hayes Boiler & Mechanical Inc., for example, whose emergency work to an air conditioner kept a restaurant open, got 60 percent of its claim.

At least five claims were disallowed because they were filed late. The last to be paid was the court itself, authorizing payment on December 13, 2000, of a $1,041 fee.

Goldstein submitted her final account on March 23, 2001 and on March 26, 2001, the case was closed. The last filing was on June 24, 2001.

Other attorneys involved in the bankruptcy case, its appeal, and/or related lawsuits...

• Adelman, Howard L. – Adelman, Gettleman & Merens, Ltd.
• Ahern, John E.
• Alsterda, Richard Scott – Ungaretti & Harris LLP
• Burke, Edward J. – Burke, Burns & Pinelli, Ltd.
• Cagney, Mary Ellen – Assistant State’s Attorney’s Office
• Esrig, Jerry A. – Zaideman & Esrig, P.C.
• Fahner, Tyrone C. – Mayer Brown LLP
• Fenton, Marc Ira – Neal, Gerber & Eisenberg LLP
• Fox, Paul Thaddeus
• Geller, Jay Steven – Jenner & Block LLP
• Gensburg, Matthew Thomas – Greenberg Traurig, LLP
• Harte, William J. – Cotham, Harwell & Evans
• Harwell, Mark C. – Cotham, Harwell & Evans
• Hercules, Larry K. – Hercules & Hampton, P.C.
• Heyman, Glenn R. – Dannen, Crane, Heyman & Simon
• Joyce, Edward T. – Edward T. Joyce & Associates P.C.
• Kantor, Myron – Kantor & Apter, Ltd
• Kelley, Eugene Joseph Jr. – Arnstein & Lehr, LLP
• Keryczynskyj, Leo
• Kramer, William – DLA Piper US LLP IL
• Kunkle, William Joseph Jr. – Cahill, Christian & Kunkle, Ltd.
• Laurie, Ty D. – Laurie & Brennan LLP
• Levin, Ellis B.
• Lipke, Douglas Joseph – Vedder Price P.C.
• Macey, Eric Neal – Novack and Macey, LLP
• Mandell, Michael S. – Horwood, Marcus & Braun
• Missner, David N. – DLA Piper US LLP IL
• Naughton, Mark P. Jr. – Rudnick & Wolfe
• Nicolau, Mary Terese – Cook County State’s Attorney’s Office
• Nitz, Owen – Nitz, Walton & Hammer
• Patenode, Timothy J. – Katten Muchin Rosenman LLP
• Raimondi, Nicholas – National Survey Service, Inc.
• Rasnak, Sandra – United States Trustee
• Robbins, Manuel J. – Robbins, Salomon, Wolf, Schlesinger & Miller, Ltd.
• Shapiro, Keith J. – Holleb & Coff
• Stamos, James A. – Law Office of Serpico, Petrosino & DiPiero
• Stuart, Jane L. – Assistant State’s Attorney’s Office
• Valle, Marion J. – Seay & Thomas, Inc.
• Weininger, Michael B. – Lupel Weininger LLP