Bankruptcy Trustee Sues Baldwins
The trustee running bankrupt Newport Beach home builder Baldwin Co. has sued the firm’s owners, brothers Alfred and James Baldwin, claiming they want to resurrect their development empire by wresting the rights to thousands of acres of valuable land from the business that bears their name.
Bankruptcy trustee David Gould argues that the brothers are jeopardizing his efforts to nurse Baldwin Co. through a reorganization and repay more than $250 million in debts. Last week, he won a temporary restraining order barring the Baldwins from using the land in any way pending an Aug. 30 hearing in U.S. Bankruptcy Court in Santa Barbara.
“These development opportunities are crucial assets” for Baldwin Co., which may never emerge from bankruptcy without them, the suit says.
The Baldwin brothers, ousted from operating control of Baldwin Co. in May, are in business as Village Development. The company, which formerly was called Village Properties and was not part of the bankruptcy case, has sold Baldwin Co. most of the raw land for its housing developments.
Village’s properties include about 16,000 acres in the Otay Mesa region of southern San Diego County, as well as hundreds of acres in master-planned communities in Thousand Oaks, Oxnard, north San Diego County and the south Orange County planned community of Portola Hills.
The dispute centers on a long-standing agreement giving Baldwin Co. the first option to acquire land owned by Village Development. Gould alleges that the Baldwin brothers are actively developing and marketing some of the land without having first offered it to Baldwin Co. The brothers contend, however, that the agreement has been canceled.
Already, the suit says, Village Development has surrendered title to 80 lots, worth $4 million, in the San Diego County community of Del Mar to stave off foreclosure of the property and has begun building homes on 23 lots in the same development.
The Baldwin brothers also are in the process of obtaining financing to develop other properties owned by Village and are actively selling homes in a 106-acre Baldwin-developed project in Ventura County called Lang Ranch, the suit says.
The Baldwins could not be reached for comment but in a recent court filing insist that the agreement was nullified earlier this year when Village severed its ties with Baldwin Co. after paying off $60 million in debt. The brothers have argued that they would be forced out of business if Baldwin Co. retains the first rights to acquire property from Village.
