California Coastal Communities Exits Bankruptcy

IRVINE, CA-Developer California Coastal Communities has exited its Chapter 11 bankruptcy, the company said Wednesday. CEO Raymond Pacini says that lender support helped the company exit bankruptcy and provided additional capital to fund construction.

"With bankruptcy behind us, we look forward to focusing on building and selling homes," Pacini said in a prepared statement. He thanked the company's lenders for their support in helping California Coastal exit bankruptcy and providing additional capital to fund construction. "I also want to thank our homebuyers for their patience and our employees for their persistence over the last 16 months, as we navigated our way through this process," Pacini said in the statement.

California Coastal Communities is a residential land development and home-building company whose principal subsidiaries are Hearthside Homes which is a homebuilding company, and Signal Landmark, which owns 110 acres on the Bolsa Chica mesa where sales commenced in August 2007 at the 356-home Brightwater community. Hearthside Homes has delivered over 2,300 homes to families throughout Southern California since its formation in 1994.

The United States Bankruptcy Court for the Central District of California confirmed the company's plan of reorganization in February. The reorganization plan was filed last year and was supported by a majority of California Coastal's senior lenders, according to information on the company's web site. It said that lenders comprising 81% of the senior revolving loan and 88% of the senior term loan supported the plan.

The company had negotiated a previously announced plan support agreement with the lenders that included a deleveraging by converting $56 million of the senior term loan into equity and providing no recovery for current equity holders at the time.