Silvercrest Operation Files for Bankruptcy Protection

Santiago Estates, a manufactured housing project owned by a subsidiary of Santa Ana-based Silvercrest Industries, has filed for Chapter 11 bankruptcy protection to avoid claims from a former partner, Silvercrest said Thursday.

Santiago Estates, a limited partnership operated by Silvercrest’s Santiago Corp. subsidiary, is developing a 385-acre, 800-unit manufactured housing park in the San Fernando Valley.

A year ago, Silvercrest signed with Los Angeles home builder Kaufman & Broad to jointly develop the project.

Contentious Ending

That partnership came to a contentious close in January when Kaufman & Broad filed suit against Silvercrest in Superior Court in Los Angeles, alleging that Silvercrest had defrauded Kaufman & Broad to obtain its participation in the project.

In its filing, Santiago Estates listed assets of more than $30 million, and debts of $21.5 million.

“Even though assets are greater than debt, we wanted to protect the firm from Kaufman & Broad,” said Silvercrest Vice President Gary King.

King said the Chapter 11 filing will allow Santiago Estates to continue development of the manufactured housing community, which Silvercrest claims will be the largest in Los Angeles.

Earlier last month, Silvercrest signed an agreement with Watt Industries, a Santa Monica firm, to jointly develop the community.

Parent company Silvercrest Industries has no plans to seek bankruptcy protection, King said. “Our operations are doing OK.”

Silvercrest reported net income of $565,000 for the fiscal 1988 first quarter, which ended Sept. 30, on revenue of $20 million.