LandSource Communities Development, LLC, owner of Newhall Land, Sunday filed a voluntary petition for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.
As a LandSource subsidiary, Valencia-based Newhall Land is included in the filing.
LandSource, which plans and develops master-planned communities and transforms land into ready-to-build home sites and commercial properties in Arizona, California, Florida, New Jersey, Nevada and Texas, had attempted for several months to reach agreement with its lenders to restructure its debt. LandSource defaulted on loan payments due April 22.
“LandSource believes chapter 11 provides the most effective means for the partnership to preserve the value of its business, meet post-petition obligations and maintain constituents’ confidence while it works with creditors to achieve a long-term restructuring,” Tamara Taylor, Landsource spokeswoman, said in a statement.
Taylor’s statement added that LandSource has received commitments for debtor in possession (DIP) financing from a group of lenders led by Barclay’s Bank, including a $135 million revolving line of credit that will enable LandSource to meet post-petition obligations and fund operations during the chapter 11 reorganization.
According to LandSource, the DIP financing assures that its vendors, contractors and consultants will be paid for goods and services provided after the June 8, 2008 filing date.
“This post-petition financing assures that there will be no interruption in day-to-day operations,” Marlee Lauffer, Newhall Land spokeswoman, said in a separate statement.
“Newhall Land, a 125-year-old company and 40-year developer of Valencia, will continue to plan the remainder of Valencia and its future Newhall Ranch with the utmost integrity and commitment to the community,” she continued.
“Newhall Land has weathered fluctuations and retrenchments in both the California and national real estate markets before,” Lauffer said. “We have every intention not only to survive the current real estate downturn, but (also) to flourish once the market stabilizes.”
With the exception of one development project in Marina del Rey, Calif., LandSource does not build homes or commercial properties.
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