IRVINE, CA-The US Bankrtupcy Court for the Central District ofCalifornia has approved a plan that will provide $184 million inrefinancing for developer California Coastal Communities to emergefrom Chapter 11 bankruptcy. The $184 million will refinance theproject debt for the Irvine-based company's Brightwaterdevelopment.

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California Coastal said previously that it had obtained acommitment from an investor for the refinancing, whicgh remainssubject to the successful negotiation and execution of definitiveloan documents and the court's approval of the company's plan ofreorganization in order for it to exit bankruptcy. CaliforniaCoastal Communities, as GlobeSt.com reportedearlier this week, is the parent of home builderHearthside Homes and Signal Landmark, which owns 110 acres on theBolsa Chica Mesa. The company says that the new financing willreplace its existing secured debt.

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California Coastal CEO Raymond J. Pacini commented in thatreport that the new financing, if approved by the court, “willprovide a more certain exit from bankruptcy without the risk oflitigation.” Pacini said further that one result of the financingwill be that that California Coastal will be able to “sell homes ata pace that allows the company to benefit from the inevitablerecovery in coastal home prices.

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In connection with the financing commitment, California Coastalwill amend its plan of reorganization to provide for the repaymentof the existing debt in cash upon the effective date of the plan.California Coastal and some of its direct and indirect wholly ownedsubsidiaries filed Chapter 11 petitions in October 2009. TheIrvine-based company said in its filings and press statements atthe time that it sought to extend the maturity on financing for its356-home Brightwater development overlooking the Bolsa Chicawetlands in Huntington Beach.

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Pacini said at the time that the company had been negotiatingfor some time in an effort to persuade all of its lenders to agreeto the extension of the maturity date, but the company was not ableto reach agreements with all of the lenders and then chose to filefor bankruptcy.

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