Barclays Bank's proposed plan to liquidate the assets of LandSource by auction was a "meaningless gesture" at this point because it didn't file the required disclosure statement with the bankruptcy court detailing completely how the plan would work, the giant land development company's attorney said Friday, Oct. 17.
"There was no reason for them to file this," said Debra Dandeneau, a partner at Weil, Gotshal & Manges, the firm representing California-based LandSource in the Chapter 11 Bankruptcy filing. Edwin J. Harron, an attorney representing Barclays at Young Conaway Stargatt & Taylor in Wilmington, Del. did not return phone calls seeking comment.
Barclays, which represents more than 100 banks that bought pieces of LandSource's debt, filed its plan on Monday, Sept. 13, after the 120-day period during which LandSource had the exclusive right to propose a reorganization plan without facing opposing plans for creditors expired.
Dandeneau said LandSource had agreed not to ask for an extension of the 120-day window of exclusivity unless it met certain conditions, including getting the company's three equity owners, Lennar Homes, LNR Property Corp., and a partnership of CalPERS, Weyerhaeuser Real Estate, and McFarlane Partners, to agree to a plan.
"We felt they met those conditions," Dandeneau said. "We could fight the banks on this but, on the other hand, we decided it's not really worth fighting over exclusivity. ... What really matters is how we are going to end up restructuring the company."
"We plan to work with the banks and our other constituents to develop a plan that works and addresses the concerns of all our stakeholders," Dandeneau said. "How do you design a process in this day's market that is fair and that does optimize value and that does preserve value? Everybody should have the goal of maximizing the value."
Of most import is preserving the value of the company's Newhall properties in the Santa Clarita Valley just north of Los Angeles, which comprise 23,000 of the company's 35,000 lots.
"We think it's important that, whatever we do, we realize that we preserve Newhall as an ongoing operating business. I think the banks actually understand that," Dandeneau said.
LandSource is marketing other land for sale to generate cash. "There is no fixed asset liquidation schedule," Dandeneau said. "We are in the process of marketing some of our assets to increase liquidity."
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