LandSource Exits Ch. 11 as Newhall Land

LandSource, which was a joint venture between Miami-based Lennar Corp., LNR and CalPERS, was one of the largest national master planned community developers in the US and filed a voluntary Chapter 11 bankruptcy petition in the US Bankruptcy Court in Delaware almost 13 months ago. With its exit from Chapter 11, Newhall Land Development becomes "one of the only major real estate development companies to reorganize and emerge from bankruptcy in the current recession," according to the law firm of Greenberg Traurig, which represented Barclays Bank Plc as the plan proponent and administrative agent for LandSource's $1.2 billion super-priority debtor-in-possession first lien credit agreement. The law firm also advised the steering committee of secured lenders under the credit agreement.

Newhall Land Development is "financially strong with more than $90 million of cash and no debt on its beginning balance sheet," according to a statement by the new company. It says it will have "the additional resources and financial flexibility necessary to focus on planning and developing the remainder of the existing community of Valencia and the future Newhall Ranch." The company consists primarily of the Newhall Land and Farming Co. in Los Angeles County, the Newhall Orchard, Valencia Water Co. and the TPC Valencia Golf Club.

A recent statement by Miami-based Lennar said that, as part of the bankruptcy reorganization plan, Lennar will invest approximately $140 million in exchange for a 15% equity stake in the reorganized Newhall. The remainder of the ownership group consists of a group of investment funds led by Anchorage Advisors LLC, Third Avenue Management LLC, funds affiliated with Och-Ziff Capital Management Group LLC, funds affiliated with Marathon Asset Management LP and TPG Credit Management LP.

Newhall Land will be managed by Emile Haddad, the CEO of Five Point Communities Management Inc., a newly formed management company jointly owned by Haddad and Lennar. Haddad resigned as Lennar's chief investment officer to assume his new duties at Five Point and will be joined by more than 20 former Lennar executives.

Although Newhall Land Development is a new company, the Newhall Land Co. is one of the oldest and largest developers in Southern California, having developed the master-planned community of Valencia, comprising 20,000 homes as well as commercial developments, in the Santa Clarita Valley. Newhall owns some of the last remaining large, undeveloped land in the greater Los Angeles area. It also owns 700 acres of commercial land and other property in the Santa Clarita Valley.