Developer Files for Chapter 11 to Retain 212 Acres

The Centennial Group Inc., an Orange-based developer, filed Friday for federal bankruptcy protection from creditors.

By filing for a Chapter 11 bankruptcy reorganization in federal court in Santa Ana, Centennial fended off imminent foreclosure on 212 acres of prime property in Sacramento County, said Jeffrey W. Broker, an Irvine bankruptcy lawyer representing the firm.

Laguna Business Park Inc., the investors who sold and financed the property, had scheduled a foreclosure sale for 10 a.m. Monday.

Centennial Group “has significant equity in the land and thought it was worth saving,” Broker said. He said the firm owes $8 million against the partially developed land, which is valued at $28 million.

In total, Broker said, the bankruptcy filing protects $200 million worth of land holdings in Arizona and California. The company owes $60 million on the properties.

“In most bankruptcies, the company’s liabilities are greater than its assets,” Broker said. “This is a highly unusual filing.” He said that Centennial’s problems stem from the difficulty that developers face today in obtaining refinancing for real estate loans.

John B. Joseph and Ronald R. White founded the publicly held company four years ago to handle their six real estate limited partnerships. The developer lost $17.6 million on revenue of $14.5 million for its fiscal year 1991.

Neither Joseph nor White could be reached for comment. But White, chairman and president, said in statement Friday that the company has a number of large loans “already due or coming due in the near future.”

One of Centennial’s subsidiaries, Arizona Commercial Property Development Inc., filed for a Chapter 11 bankruptcy earlier this year. The petition filed by Centennial Group does not include any of the company’s operating subsidiaries.

Over the past year, Centennial’s stock has traded between 12 cents and 50 cents a share. The stock closed Friday at 13 cents on the American Stock Exchange.