A bankruptcy court judge has given permission for LandSource Communities Development to sell several chunks of its Riverside County, Calif., assets to a Dallas-based investor for $8.8 million.
In an order filed April 17, Kevin J. Carey, chief judge of the U.S. Bankruptcy Court's Delaware division, said LandSource could sell more than 500 lots and parcels to Lamar 2000 Holding Corp.
The sale, which has not closed, does not include any of LandSource's prized Newhall Land and Farming assets located in the Santa Clarita Valley 30 miles north of Los Angeles. Rather, the sale includes lots in California's Inland Empire, Riverside County, an area hard hit by the residential building recession.
Included are the proposed sale is land in Harveston 1 and 2 in Temecula, Calif.; McSweeney in Hemet; Indian Palms and The Bridges at Jefferson in Indio; Vista Escondita in Coachella; and Palm Springs Classic in Palm Springs.
Despite the similarity in names, Lamar is not connected to Lennar, which has an interest in LandSource Communities, said two LandSource principals. Craig Martin, who was listed in the bankruptcy court documents as a contact for Lamar and who was reached at the Dallas address listed, said the company does not comment on pending acquisitions.
In other actions, judge Carey agreed to postpone a hearing on a plan to reorganize the company and bring it out of bankruptcy until May 1.
Under the proposed plan, which was filed March 20, Barclays and its syndicate of several hundred lenders would forgive its $1 billion lien in return for the lion's share of the company.
Lennar, which owns 16% of LandSource, would spend $140 million in return for 15% of the reorganized company; out-right ownership of several significant developments now held in LandSource, and settlement of some Lennar-related claims. The land Lennar would gain title to through its investment includes Mare Island, Kingwood/Royal Shores, Placer Vineyard, and interests in Lennar Bridges and HCC Investors.
The reorganization plan, which requires approval by creditors and the court, also calls for a non-public rights offering for shares in the newly reorganized LandSource to be sold to generate capital. Barclays would buy whatever isn't farmed out to other investors.
MW Housing Partners, the company that bought the 68% of LandSource from Lennar and LNR Property, would appear to lose its investment under the filed plan. MW Housing Partners was a partnership between the California Public Employees' Retirement System (CalPERS), Weyerhauser, and MacFarlane Partners.