Plan for World Industrial Center Ltd. : Ex-Owner Files to Reorganize Bankrupt Irvine Firm
The former owner of defunct Consolidated Savings Bank of Irvine filed a plan Wednesday in U.S. Bankruptcy Court to sell a former hazardous waste dump site in Carson and use the proceeds to pay off the federal government’s thrift insurance fund and other creditors.
The plan filed by Robert A. Ferrante to reorganize bankrupt World Industrial Center Ltd. calls for the sale of 90% of the 157-acre commercial property for $36.5 million to BCE Development Inc., a subsidiary of a Canadian telecommunications company.
The Federal Savings & Loan Insurance Corp., which took over Consolidated in May, 1985, and later closed it, would get about $22 million under the plan. FSLIC is the only secured creditor of WIC.
Ferrante, Consolidated’s former owner, said the proposed property sale to BCE could have been made 3 years ago. If it had, it could have saved Consolidated from being seized by regulators, he said.
Ferrante wrested control of WIC from Ranbir S. Sahni, former head of failed American Diversified Savings Bank in Costa Mesa. Sahni said he would fight to regain control of the partnership.
The plan submitted by Ferrante is the first formal reorganization proposal for WIC, which filed for protection from creditors under Chapter 11 of the federal bankruptcy code in May, 1985.
Bankruptcy Court Judge John Ryan said Wednesday that WIC finally “has a chance” to emerge from bankruptcy with its debts paid. “I think there is much hope here,” he said.
In giving the green light to creditors to consider Ferrante’s plan, Ryan denied a motion to approve the sale of the Carson property to Ishikawa Development Corp., a Newport Beach firm incorporated in April by Yoshio Ishikawa of Newport Beach.
Lawyers for FSLIC and other creditors had opposed the sale to Ishikawa on the grounds that the sale price and other terms were inadequate.
The 157-acre property, along the San Diego Freeway in Carson, has had a long and convoluted history.
Hazardous wastes were dumped there through the mid-1960s, and successive owners have bulldozed the property and otherwise tried to clean it up to turn it into a buildable site. Environmental studies recently have indicated that it is safe to build on, lawyers said.
Ferrante had gained control of WIC in the mid-1980s and sold his interest in October, 1985, to World Development Corp., which Sahni owned. Consolidated ended up as the owner or beneficiary of notes totaling $37 million on the deal.
WDC, however, made only one payment of $96,000 before defaulting. Sahni’s S&L; was seized in February, 1986.
Sahni put WDC in bankruptcy in September, 1987, as a way to fight foreclosure on the Carson property and to stall Ferrante from exercising his right to retake control of WIC. Ryan dismissed the WDC petition 9 days ago, opening the door for Ferrante to regain control of WIC.
On Monday, Sahni again had WDC file a Chapter 11 petition, which lists the value of the Carson property at nearly $50.2 million. Though lawyers urged Ryan on Wednesday to throw the latest petition out, the judge declined, saying the matter would be dealt with in the normal course of court hearings.
