Westamerica Inc., a Holding Company, Files for Chapter 11

Westamerica Inc., the Irvine-based holding company for a group of bankrupt real estate investment firms that had gambled and lost on out-of-the-way properties, has filed its own petition for protection from creditors’ claims.

In its Chapter 11 petition, filed Friday in federal bankruptcy court here, Westamerica listed $2.2 million in assets and $40.6 million in potential debts--mainly from a series of civil lawsuits filed against the company and its subsidiaries by the former owners of properties purchased in the 1980s.

In an earlier interview, Westamerica President Robert Murton said the company had formed a number of partnerships with landowners in Riverside and San Bernardino counties to acquire and prepare the landowners’ properties for residential and commercial development.

The properties, purchased in the middle and late 1980s, generally were located in areas that were not in demand at the time but were thought to be desirable for future development.

The Westamerica subsidiaries typically acquired properties in cashless transactions by forming partnerships with the landowners and agreeing to take over carrying costs while the land was being readied for sale.

Murton, who was hired in August to help revive Westamerica, said the recession and collapse of the building boom destroyed the market for the properties.

Westamerica subsequently ran out of cash and credit with which to continue financing the purchases and was sued by several of its landowner partners.