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Court to appoint restructuring officers

Two developers will be in charge of LandSource reorganization

Posted: August 3, 2008 8:53 p.m.
Updated: October 5, 2008 5:02 a.m.
 
A bankruptcy court judge on the East Coast is expected to authorize two accomplished California housing developers to try and restructure the company that owns Newhall Land and Farming.

On Wednesday, LandSource Communities Development LLC, the company that owns Newhall Land and Farming, filed an application in United States Bankruptcy Court in the District of Delaware for permission to enter into an agreement with Timothy P. Hogan, former chairman and Chief Executive Officer of Warmington Homes, and H. Lawrence Webb, former Chief Executive Officer of W.L. Homes that would put them in charge of restructuring the debt-saddled company.

The application seeks to name the two developers "Chief Restructuring Officers" in charge of turning the company around.

Included in the application is a four-page order left for U.S. Bankruptcy Court Judge Kevin J. Carey's signature authorizing the order.

The application comes the day after an affidavit was filed with the same court by former California governor Gray Davis, now a lawyer with the Los Angeles-based law firm Loeb & Loeb LLP, stating the firm was requested by LandSource to "provide strategic advice and counsel."

Under the terms of the Chief Restructuring Officer agreement, LandSource agrees to pay Hogan and Webb $120,000 a month, or about $4,000 a day for the first phase of their attempt at restructuring the company.

Under the same terms, the pair of restructuring officers will, in the first phase of the agreement, work with the eight-member executive committee of LandSource Communities to come up with a reorganization plan.

If such a plan is not filed with the Bankruptcy Court within 120 days, Hogan and Webb will be the sole ones at the helm.

Specifically, if no restructuring plan is filed with the Bankruptcy Court in the specified time, the application by Landsource states: "The CROs will be deemed the sole members of the Executive Committee, and shall have all the powers and duties thereof as set forth in the LLC Agreement."

Timothy P. Hogan joined Warmington Homes in 1980, specializing in land acquisition and finance and served as president of that company's home building division from 1987 to 2007.

Last year, he was appointed chairman and CEO of the company.

Warmington Homes built about 1,000 homes annually and was ranked among the top ten home builders in Orange County.

H. Lawrence Webb has led an almost parallel career.

Until recently, he was the CEO of W. L. Homes LLC, the second largest privately held home building company in the United States.

W. L. Homes is expected to build at least 40 homes in Canyon Country this fall.

The company, under Webb's direction, grew into 13 divisions in California, Colorado, Arizona and Texas as John Laing Homes.

Under his leadership, W.L. Homes grew from $384 million in revenues during 1998 to more than $1.6 billion in 2006.

On June 8, LandSource Communities Development LLC - a land-development company based in Aliso Viejo in Orange County and owner of Newhall Land - filed a voluntary petition for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.

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