Trustee Takes Over Brothers’ O.C. Construction Company

After nine months of litigation, James and Alfred Baldwin lost control of their construction company to a trustee Friday.

David Gould, a Los Angeles lawyer, took control of the Newport Beach-based Baldwin Co., which filed a Chapter 11 bankruptcy petition in July in Santa Barbara.

“They are out,” a creditors’ attorney, David Frauman, said of the brothers.

“They did not contest the trustee,” said Annette McCluskey, a Baldwin spokeswoman.

The brothers will remain shareholders of the company, and their stock has been pledged against an $85-million loan. Court records show that loan is in default.

Gould was expected to hire a new manager to handle day-to-day operations. James Johnson, a turnaround specialist currently running Newport Beach-based Lusk Co., was expected to take the job, Frauman said.

Creditors hope the move will clear the way for an $8-million loan from Merrill Lynch & Co. The brokerage refused financing as long as the Baldwin brothers were in control.

The Baldwins have also appeared in Bankruptcy Court in San Diego recently.

West Coast Land Fund wants to foreclose on 1,000 acres of the brothers’ 22,000-acre Otay Ranch. Much of the property is owned separately from the home building company. The Baldwins’ Tiger Development partnerships have been in bankruptcy since Feb. 8.