“Wait and see.” That will be the name of the game over the next four weeks as stakeholders anticipate a hearing at which a judge could order that Newhall Land and Farming Co.’s bankrupt owner be split up, with assets sold off to the highest bidder.

The committee of unsecured creditors has requested LandSource Communities Development LLC’s Chapter 11 bankruptcy filing be converted to a Chapter 7 filing – changing it from a reorganization to a liquidation.

Chapter 11 bankruptcy allows a company to reorganize while a trustee operates the business. Under Chapter 7 bankruptcy, the business ceases operation and its assets are sold to satisfy its debts.

U.S. Bankruptcy Court Judge Kevin J. Carey will decide at a July 13 hearing whether to approve the submitted reorganization plan, or to rule in favor of converting it to a chapter 7 filing.

“So much is uncertain right now,” said city spokeswoman Gail Ortiz, who added city officials are concerned about the bigger picture of how the bankruptcy issues affect the local community.

While some bankruptcy attorneys remain skeptical that the creditors would even see much – if any – of a return through liquidation, the group stands to lose a lot either way.

The 186-page claims list includes 415 unsecured claims with local connections – either by local companies or against Newhall Land or another LandSource subsidiary – totalling roughly $23 million.

Unsecured claims are defined at www.uscourts.gov as claims or debts “for which a creditor holds no special assurance of payment, such as a mortgage or lien. (It is) a debt for which credit was extended based solely upon the creditor’s assessment of the debtor’s future ability to pay.”

Among the unsecured claims in the LandSource filing is a nearly $300,000 claim by the William S. Hart Union High School District, and about a half-million dollars in claims by the city of Santa Clarita.

Hart district spokeswoman Pat Willett said Wednesday that district lawyers are trying to figure out what the claim is for.

If the district were to see any return, she said the money would have to go toward construction costs.

Assistant City Engineer Curtis Nay referred questions about the city’s claims to city attorney Carl Newton, who could not be reached Friday afternoon.

Newhall Land officials have remained tight-lipped about the future of one of the valley’s oldest companies.

“We’re in the middle of a court process that’s very defined,” said Newhall Land spokeswoman Marlee Lauffer. “We’re very encouraged by the reorganization plan, which is a very appropriate plan to bring the company out of Chapter 11.”

She declined to discuss what a Chapter 7 liquidation filing could mean for Newhall Land.

LandSource – owner of Newhall Land – filed for Chapter 11 protection on June 8, 2008. At the time, the company received debtor-in-possession financing of $1.185 billion from a group of lenders led by Barclay’s Bank.

If the Chapter 11 reorganization plan is approved, Lennar Corp., which was a majority owner of LandSource along with the California Public Employees’ Retirement System, will end up with 15 percent of the new stock at a cost of $140 million.

Lennar sold most of its 50-percent stake at the peak of the real-estate market for $660 million, and had a 16-percent stake in Newhall Ranch before the Chapter 11 filing.

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