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Tracking measurable success on efforts across California to preserve and connect our Parks & Wildlife Corridors



WE POST NEWS THREE WAYS:
1. long detailed stories on blogspot (here!)
2. short messages on Twitter
3. automated news feeds from CA enviro websites in the right-hand column which change frequently and are not archived by our website (that's why we now have a twitter account to permanently capture the memorable feeds)

Wednesday, June 11, 2008

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Newhall Ranch Owner Goes Bankrupt;

One of two largest land owners in L.A. County

CalPERS-backed LandSource files for Chapter 11
From L.A. Times Staff and Wire Reports

June 10, 2008

A California real estate partnership that the California Public Employees' Retirement System poured about $1 billion into has filed for Chapter 11 bankruptcy protection.

LandSource Communities Development's assets include 15,000 acres of undeveloped land in the Santa Clarita Valley, among the largest land deals to falter amid the national housing glut. The land was appraised at $2.6 billion at the time of the CalPERS investment, but has dropped considerably in value since then.

CalPERS, the nation's biggest pension fund, provides pension, healthcare and other retirement services for about 1.5 million public employees. CalPERS did not immediately return calls Monday. Last month, its president, Rob Feckner, told the Los Angeles Times he hoped to forestall a bankruptcy filing but stressed that "if we incur any losses, they will be minor" because the pension fund is "very well diversified, in good shape."

LandSource issued a news release late Sunday to announce its filing in U.S. Bankruptcy Court in Delaware.

Santa Clarita-based LandSource had been trying for months to restructure a $1.24-billion debt, the company said. It received a default notice on April 22 after missing a payment when a decline in the assessed value of that northern Los Angeles County land holding triggered an additional charge.

"LandSource believes Chapter 11 provides the most effective means for the partnership to preserve the values of its business . . . while it works with creditors to achieve a long-term restructuring," spokeswoman Tamara Taylor said in the release.

Attempts to reach Taylor and LandSource were unsuccessful.

LandSource operates in California, Arizona, Florida, New Jersey, Nevada and Texas.

The partnership announced that it had received a $135-million line of credit from a group of lenders led by Barclays Bank, allowing it to fund operations during the Chapter 11 period.

CalPERS, with $254.8 billion in assets, is involved in LandSource through its participation in MW Housing Partners, an investment fund managed by MacFarlane Partners.

MW Housing Partners acquired 68% of the Santa Clarita property, along the Interstate 5 corridor 30 miles north of Los Angeles, from home builder Lennar Corp. and LNR Property Corp., a unit of Cerberus Capital Management.

Lennar and LNR each maintained a 16% interest in LandSource.
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a comment on the Times' website reveal more:

http://latimesblogs.latimes.com/laland/2008/06/bankruptcy-for.html

About 2 weeks ago, Standard & Poors reported that LandSource, Newhall Land's parent company, had $25 Million in cash left in their bank accounts. Standard & Poors had conducted a 'private audit' of LandSource's financial condition at the request of LandSource's mortgage lender, Barclays Bank. So the $25Million cash was real, not funny money.

Yet, in filing Chapter 11, LandSource and Newhall Land chose to royally scr*w all of their California trade creditors by not paying them, even though that $25 Million is cash was available. Now, these local companies are unlikely to ever be paid.

Adding insult to injury, LandSource and their mortgage lender have done a prepackaged Debtor In Possession financing, which is scheduled to be approved at 10AM on Tuesday 6/10, without any meaningful notice to the unsecured California trade creditors, since the bankruptcy was filed in Delaware even though the vast majority of the assets, and all the major unsecured creditors, are in California.

Showing their contempt for their unsecured creditors, LandSource also had the nerve to create a creditors notice website at www.kccllc.net/landsource and purport to provide copies of all of the bankruptcy petitions for the 21 entities, BUT they conveniently left off the most important bankruptcy petition, the one for the parent company LandSource Communities Development LLC.

So the California unsecured creditors who were stiffed should be asking "Where did the last $25 Million go?" From the unsecured creditors schedules on the actual bankruptcy petitions, here are just some of the local companies stiffed by LandSource:

PCL Construction, Glendale, $6,060,480
Park West Landscape, Pacoima $1,245,062
Oak Ridge Landscape, North Hills $`,056,303
Hunsaker & Assoc., Valencia $905,156
Psomas & Assoc., Santa Clarita $816,033
John Burgeson Contractors, Canyon Country $800,157
RC Becker & Sons, Santa Clarita $800,151

There are many more local service providers and contractors from Ventura County, Orange County and LA County south of Mulholland also cheated out of what was due them, while the $25 Million was frittered away, or horded to pay Newhall Land's generous employee payroll and benefit package. See the schedules to the bankruptcy petitions at the website established by LandSource at http://kccllc.net/landsource

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