LandSource Communities Development
LLC, a large Californian property developer backed by Calpers,
the biggest public U.S. pension fund, said on Sunday it had
filed for bankruptcy protection.
While not a shock, the news is a blow to companies and
funds unable to extricate themselves from troubles in an
industry laid low by the credit crisis.
It said however, it "expects not only to survive the
current real estate downturn and credit crunch, but to flourish
once the market stabilizes."
LandSource said it had received commitments for debtor in
possession financing from a group of lenders led by Barclay's
Bank (BARC.L), including a $135 million revolving line of
credit.
It said that the facility assures that vendors, contractors
and consultants will be paid for goods and services provided
after the bankruptcy filing date.
"For several months LandSource has attempted to reach
agreement with its lenders on an interim plan that would
provide the needed time for a complete review of its financial
situation," LandSource noted in a statement.
LandSource's primary investment is The Newhall Land and
Farming Company, which owns 15,000 acres of land north of Los
Angeles.
At the end of April, a Standard & Poor's report said the
company would soon seek protection from creditors, citing
unnamed lenders. S&P said the company's cash had declined to
about $25 million from about $115 million in early February.
LandSource spokeswoman Tamara Taylor said then the company
had received an official notice of default on a $1 billion
loan, but the default situation "had not accelerated" further.
LandSource is a joint venture between home builder Lennar
Corp (LEN.N), LNR Property Corp, which each have a 16 percent
stake and MW Housing Partners, which holds a 68 percent stake.
MW Housing Partners, is co-managed by a Weyerhaeuser Co
(WY.N) subsidiary and McFarlane Partners on behalf of the
California Public Employees' Retirement System (Calpers).
LNR Property Corp, a one-time spin-off of Lennar, was taken
private by Cerberus Capital Management (CBS.UL) and others in
early 2005.
(Reporting by Christopher Kaufman; editing by Rory
Channing)
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