View Mobile Site
zone code Advantage Code _
 

Ask the Expert

Signal Photos

 

Claims against LandSource could net 1 percent

Posted: June 18, 2009 9:13 p.m.
Updated: June 19, 2009 12:26 p.m.
 

Among myriad unsecured claims in the bankruptcy case of Newhall Land’s parent company are some $6.4 million in country-club membership fees, $2.2 million in claims by company employees and a half-million dollar construction tab picked up by the city.

If a judge signs off next month on the proposed Chapter 11 reorganization plan for LandSource Communities Development LLC, Newhall Land and Farming Co.’s unsecured creditors stand to get back up to 8 percent of their claims, according to court documents.

If the court rules to convert the case to a Chapter 7 liquidation case, those creditors would see about a 1-percent return.

That means if all the country club members in the claims register wanted their money back, they’d have to divide a pot of $512,000 — or $64,000 if the creditors see 1 percent.

Likewise, the city could look at recovering as little as $4,490 — or as much as $35,920.

Of the $34.4 million in unsecured claims against Newhall Land listed in the register, an 8-percent return would equal $2.75 million while a 1-percent return would leave a paltry $340,000.

In Santa Clarita’s case, the city spent $449,000 widening Newhall Ranch Road between Rye Canyon Road and Dickason Drive, with the promise that Newhall Land would reimburse the city, according to an attorney with Burke, Williams and Sorensen, the firm with which the city contracts.

“They’d always been good for it,” the attorney said, referring to past agreements between the city and Newhall Land.

All that changed after LandSource filed for Chapter 11 bankruptcy protection on June 8, 2008.

Earlier this month the committee of unsecured creditors filed a motion in the U.S. Bankruptcy Court in Delaware, asking for the reorganization plan to be converted to a Chapter 7 liquidation.

Attorneys for the city are still analyzing the proposal before making a recommendation to the city.

Taking up multiple pages of the claims register are 205 unsecured claims totalling roughly $6.4 million on the part of members of the Tournament Players Club Valencia, which is owned by Newhall Land.

Those claims represent membership fees, a Newhall Land official confirmed.

Local businessman Don Fleming is one of those members, having paid $15,000 when TPC opened in 2003, with an agreement that, if roughly three years later he decided to remain a member, he would pay an additional $10,000 — bringing his total membership fee to $25,000.

Membership fees listed in the claims register run the gamut from $15,000 to more than $40,000.

If a member ever decides to leave the club, Fleming explained, they are put on a list and when the club sells four new memberships, the people at the top of the list are refunded.

Fleming said he supports the reorganization plan, and added that if it were changed to a Chapter 7 suit, the club “would be padlocked the next day. ... We certainly don’t want that to happen.”

The Newhall Land employee claims — $2.2 million worth — are primarily for benefits that include things such as deferred compensation and accrued vacation days — essentially the kind of benefits that would be paid out if someone resigned from the company, spokeswoman Marlee Lauffer said.

She declined to discuss any further specifics about the claims.

Throughout the reorganization process, Lauffer has reiterated the company’s faith in emerging from bankruptcy as a better, stronger organization.

Also on the claims register is a $1 million claim by Santa Clarita Organization for Planning and the Environment. President Lynn

Plambeck could not be reached Thursday for clarification of what the claim represents.

Likewise, local construction company R.C. Becker and Sons has a claim for more than $1 million. Chief financial officer Dan Schackart could not be reached Thursday.

When LandSource filed for Chapter 11 protection last year, the company received debtor-in-possession financing of $1.185 billion from a group of lenders led by Barclays Bank.

If the Chapter 11 reorganization plan is approved, Lennar Corp., which was a majority owner of LandSource along with the California Public Employees’ Retirement System, will end up with 15 percent of the new stock at a cost of $140 million.

Lennar sold most of its 50-percent stake at the peak of the real-estate market for $660 million, and had a 16-percent stake in Newhall Ranch before the Chapter 11 filing.

 

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...