Trustee Wins Major Victory Over Owners of O.C.’s Baldwin Co.
The trustee for the bankrupt Baldwin Co. won a major victory Friday over the Newport Beach home builder’s owners with a court order requiring brothers James and Alfred Baldwin to give the company first crack at any land they want to sell through a separate development company.
The order, which enables Baldwin Co. to acquire the land on credit, could prove damaging to the Baldwin brothers, who have said they need cash from the sale of land they control through their Village Development firm in order to stay in business.
For the record:
12:00 a.m. Sept. 5, 1996 For the Record
Los Angeles Times Thursday September 5, 1996 Orange County Edition Business Part D Page 2 Financial Desk 2 inches; 50 words Type of Material: Correction
Baldwin Co.--An article in The Times on Saturday misstated part of a court order giving bankrupt Newport Beach home builder Baldwin Co. first rights to land offered for sale by Village Development, a separate business of brothers James and Alfred Baldwin. The court order specifies that Baldwin Co. must pay cash for any Village property it wants to acquire.
The Baldwins took Baldwin Co. into a Chapter 11 bankruptcy reorganization last year with more than $245 million in debts. While they own the company, they have been ousted from control of the business and their stock is considered worthless.
They continue to control thousands of acres of prime land, much of it in south San Diego County, through Village Development, which is not in bankruptcy.
The Baldwins had executed an agreement years ago giving Baldwin Co. the first right to buy any Village property that comes on the market. After being ousted from the Baldwin Co., however, they claimed that the deal had been canceled. Village has been Baldwin Co.’s major source of land and company trustee David Gould maintains that loss of the Village property would be Baldwin Co.’s death sentence.
Gould, appointed earlier this year by federal Bankruptcy Judge Robin Riblet in Santa Barbara to oversee Baldwin Co., sued to enforce the property purchase agreement. The Friday injunction reinstates the pact pending the outcome of Gould’s suit--scheduled to go to trial in March.
In other actions in the Baldwin bankruptcy Friday, Riblet:
* Approved the sale of 38 acres of Baldwin Co. property in Oxnard, which will raise $4 million for the cash-strapped business.
* Approved a pact that gives Baldwin Co. a year’s grace in repaying some of the loans it has received since its bankruptcy. The company was in default on a $20-million loan.
* Authorized a plan to enable Shea Homes to develop 320 lots in the Baldwin Co.’s Summit project in Anaheim Hills. Shea bought the land a month before the bankruptcy was filed and has been unable build on it because Baldwin Co. did not finish the grading.
The new deal calls for Shea to do the work and for Baldwin Co., which will get 167 of the lots when the grading is completed, to reimburse Shea $6.8 million.
