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Judge grants Newhall Land its wishes

Del. firm that owns developer appears in bankruptcy court

Posted: June 11, 2008 2:25 a.m.
Updated: August 12, 2008 5:02 a.m.
 
After a full day in bankruptcy court Tuesday, Delaware lawyers representing the firm that owns The Newhall Land and Farming Company succeeded in getting almost everything they asked for, including permitted access to use $35 million to carry on day-to-day business.

Tuesday marked the first full day of court proceedings in the U.S. Bankruptcy Court in the District of Delaware, during which lawyers for LandSource Communities Development LLC submitted five motions as part of its voluntary petition for Chapter 11 bankruptcy protection.

Judge Kevin J. Carey, who is presiding over the case, approved most of the "first day motions," but some were deferred for another day's discussion in court, a person close to the court proceedings told The Signal.

LandSource spokeswoman Tamara Taylor could not confirm reports that the first day motions hearing ran past 5 p.m. local time but said it went all day.

"Having received approval of our first-day motions so quickly sets LandSource on strong footing as we move towards restructuring the company," she said.

LandSource issued a prepared statement late Tuesday afternoon, announcing: "LandSource received court approval of its first day motions including interim court approval of DIP (debtor in possession) financing, permitting it immediate access to money up to $35 million to meet its post petition obligations. And to fund operations during the Chapter 11 period."

LandSource had previously received commitments for its DIP financing from Barclay's Bank. The final hearing on the DIP financing has been set for June 30 to approve the remainder of the DIP facility.

A final hearing has been set for the company's DIP financing on June 30.

The motions sought by LandSource include:
• Asking for an order directing "Joint Administration of Chapter 11 cases." This means that all 21 debtors linked to LandSource, which includes Newhall Land, be handled uniformly and not differently.
• Permission to keep using the company's existing cash management systems, existing bank accounts and business forms. This motion also asked the judge for more time.
• A request for a court order to stop utilities from "altering, refusing or discontinuing service," and at the same time a court order to assure utilities that they would be paid and establishing procedures for determining how utilities should be assured they'll be paid.
• Permission authorizing the company to continue paying wages, compensation and employee benefits. This motion also asked for a way of directing banks to honor company checks with regards to those internal companies' obligations.
• Asking for permission to employ and retain Kurtzman Carson Consultants LLC as claims and noticing agent for the debtors, and that the same consultants be allowed to act as the company's agents in Bankruptcy Court.

LandSource, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, LandSource does not build homes or commercial properties.


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