California Coastal Lands $182M to Exit Ch. 11

IRVINE, CA-California Coastal Communities has found an investor who has agreed to provide $182 million in financing to help the development company exit Chapter 11 bankruptcy. The company, which is the parent of home builder Hearthside Homes and Signal Landmark, which owns 110 acres on the Bolsa Chica Mesa, says that the new financing will replace its existing secured debt.

The commitment for the financing is subject to approval by the US Bankruptcy Court for the Central District of California, and to the negotiation and execution of definitive loan documents. California Coastal CEO Raymond J. Pacini commented in a prepared statement that the new financing, if approved by the court, “will provide a more certain exit from bankruptcy without the risk of litigation.” Pacini said further that one result of the financing will be that that California Coastal will be able to “sell homes at a pace that allows the company to benefit from the inevitable recovery in coastal home prices.

California Coastal and some of its direct and indirect wholly owned subsidiaries filed Chapter 11 petitions in October 2009. The Irvine-based company said in its filings and press statements at the time that it sought to extend the maturity on $182 million in financing for its 356-home Brightwater development overlooking the Bolsa Chica wetlands in Huntington Beach.

Pacini said at the time that the company had been negotiating for some time in an effort to persuade all of its lenders to agree to the extension of the maturity date, but the company was not able to reach agreements with all of the lenders and then chose to file for bankruptcy.