Creditor asks for Newhall land sale
A key creditor of LandSource Communities Development wants the bankrupt developer to sell its 15,000-acre tract of land north of Los Angeles to repay $1.1 billion in loans.
Barclays Bank, agent for the lenders who made the loans, proposed a plan that would grant some creditors the right to trade the debt owed to them for some of LandSource’s property through a bidding process.
Barclays filed the proposal in U.S. Bankruptcy Court in Wilmington, Del., on Oct. 13. LandSource filed for Chapter 11 bankruptcy protection in June after failing to restructure its debts.
LandSource owns Newhall Land and Farming, which is developing the 21,000-home Newhall Ranch community near Santa Clarita.
Last week, LandSource, which is majority-owned by a public pension fund, filed an objection to the plan, which it believes doesn’t maximize the value of the company, LandSource spokeswoman Maya Pogoda said.
Pogoda said she did not know the current value of the land owned by LandSource, or the amount that the company owed to lenders.
But documents filed with the Bankruptcy Court said the property in Newhall and Valencia was worth $2 billion when it was assessed two years ago.
Pogoda said the company’s financial difficulties stemmed from the real estate market crash and the credit crunch.
A group of unsecured creditors, along with builder Lennar Homes, also filed objections to the Barclays plan in court.
A hearing on the proposal Wednesday in the Bankruptcy Court was scheduled to resume Dec. 9.
LandSource is majority-owned by the California Public Employees’ Retirement System, or CalPERS, which acquired 62% of the company for $970 million in January 2007.
CalPERS spokeswoman Pat Macht said pension fund officials had not seen details of the liquidation plan and would not comment further. Once a formal plan is filed, CalPERS will make comments to the court, she said.
LandSource also owns land in Northern California, Arizona, Florida, New Jersey, Nevada and Texas.
Newhall Land and Farming is a storied California company, founded in 1883 by Henry Newhall and responsible for developing much of the modern Santa Clarita Valley.
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