The holding company of Park Highlands, a large master-planned community in North Las Vegas, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court's Nevada district.
The 1,200-acre parcel on the I-215 beltway was bought at the peak of the market, near the end of 2005 as the holding company's name indicates, at a Bureau of Land Management auction.
There's more than $230 million in debt on the property, divided among two groups of creditors, said Richard F. Holley, the attorney who filed the bankruptcy case and designated spokesman for the company's owners.
The company came close to negotiating a restructuring of the debt, reaching an agreement with more than half the investors, but fell slightly short of the 80% approval required outside of bankruptcy, Holley said.
"We feel like there is strong lender support," said Holley. About 70% of the holders of the first liens on about $130 million of the debt agreed to the changes in loan terms, and the second lienholders' approval fell slightly short of that, he said.
But after it was determined that it wasn't possible to get the approval percentages any higher outside of the bankruptcy environment, the group filed for Chapter 11 protection May 8. Under Chapter 11, only 67% of the debt holders' approval is required, Holley said.
Because the company is so close to that already, Holley anticipates the company will be out of bankruptcy within a year, with a reorganization plan presented by October.
"That's fast for bankruptcy court," he said.
The infrastructure for Park Highlands is largely in place, but there has been little to no vertical construction, Holley said.
The filing is "bare bones" and doesn't completely list all the creditors. But it does list its top 20 unsecured claims. Fees for development services and administrative fees on debt make up most of those.
Western States Contracting in Las Vegas is the top unsecured creditor. It is owed $1.16 million, according to the filing.
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