Real estate developer Jerry Trooien, who filed for bankruptcy last fall owing $284 million, has filed a plan to reorganize and try to salvage some value from his fallen business empire.

The U.S. Trustee has been pushing Trooien to liquidate and give it all up.

But the Chapter 11 reorganization plan filed Wednesday in U.S. Bankruptcy Court calls for just a few of Trooien's assets to be liquidated -- the beaver and raccoon coats, the 1988 Mercedes convertible, the cabin and the Rembrandt sketch, for instance, as well as $1 million due from a software company called Nazca Solutions Inc. in which Trooien invested. Trooien's Summit Avenue home in St. Paul, too, remains on the market for $1.8 million.

The crux of the plan has Trooien paying $325,000 to $480,000 to keep more than 60 business entities, many of which are empty holding companies, and to try to turn around nine core holdings, including the TriTech Building in downtown Minneapolis and the Sheraton Hotel in Woodbury, while letting other properties go back to the bank. In a complex sharing arrangement, in five years from the time the plan goes into effect Trooien would essentially split with creditors the value of most of the holdings, along with any cash or other distributions they generate. The sharing deal doesn't apply to certain holdings such as Trooien's property management and maintenance companies.

Secured creditors, holding mostly mortgages, would get about $2.4 million. Unsecured creditors, with estimated claims of about $100 million, would get between 3 and 15 percent of what's owed them.

GE Capital and an affiliate, which buried the hatchet with Trooien in March in exchange for $87,500, are still owed about $10 million and would have to get in line with other unsecured creditors. A loan that Minneapolis-based Dougherty Funding made for $33.5 million to buy land would also go into that pool. The plan indicates Trooien is working with Dougherty to restructure another $26 million Dougherty loaned Trooien entities for the Woodbury hotel and property in Minnetonka.

Throughout the bankruptcy Trooien has continued drawing a $30,000-a-month salary. He'll continue that after exiting bankruptcy, according to the plan, although the amount will be "dependant on future business activities."

According to the disclosure statement filed with the exit plan, the committee of unsecured creditors supports the plan, and is sending out a letter urging members to vote "yes."

The statement called the reorganization a better alternative to a Chapter 7 liquidation, because it's faster and avoids tax claims that could have hurt unsecured creditors. It also gives Trooien the benefit of potential tax gains that are of no use to the creditors but that can help Trooien in reorganizing key businesses, the plan said.

A hearing set for Thursday was cancelled after no one voiced immediate objections to the plan, although the U.S. Trustee's motion to convert the case to a Chapter 7 liquidation still stands. The plan is now set for a confirmation hearing July 21 before U.S. Bankruptcy Judge Nancy Dreher in Minneapolis.

Trooien's lawyer Jim Baillie said the goal was "to save as much of the value from these real estate projects as possible for the benefit of creditors."

Mike Zipko, who used to work with Trooien, called the case "a St. Paul tragedy."

From his offices in St. Paul Trooien once commanded a large body of Twin Cities commercial real estate as well as companies that rented out jets. He generated headlines for years during his battle with the city of St. Paul as he tried to develop an elaborate $1.5 billion urban village called the Bridges of St. Paul where his corporate offices are located, just across the river from downtown. The city ultimately nixed the project.

Trooien started coming undone during the recession and real estate crash after the aircraft companies he was part of defaulted on aircraft loans that he had personally guaranteed. JetChoice, a private jet operator Trooien was part of, filed for Chapter 7 liquidation in early 2009. A battle with GE Capital, which claimed it was owed more than $17 million in aircraft-related loans, ensued. Trooien filed for Chapter 11 bankruptcy protection last October.

Then in February, federal agents raided Trooien's St. Paul offices looking for information related to fraud at the Cloud 9 Sky Flats, an office tower in Minnetonka that Trooien converted to condos. Three real estate professionals were charged in a mortgage fraud scheme at the building, and two have pleaded guilty, but Trooien has not been named or charged.

Many of the more than 60 entities Trooien would keep in the proposed exit plan are empty holding companies. Some hold distressed real estate that's in some stage of going back to the lender but that could still have tax benefits for Trooien. Under the deal, he will try to turn around nine core holdings: six buildings in foreclosure and three service companies. According to the plan, Trooien thinks he can get lenders to extend or restructure the loans and find new investors to inject more money into those deals.

Buildings not on Trooien's list to keep include two St. Paul properties: his corporate offices at 10 River Park Plaza and the 325,000-square-foot office building at 2751 Shepard Road that U.S. Bank used to lease. Trooien owes about $30 million, on the Shepard Road building which was valued for tax purposes last year at about $28 million.

The prospects for that building are grim, the plan said, and Trooien doesn't think there are any potential tenants in the region looking for that kind of office space.

Jennifer Bjorhus • 612-673-4683