From the sddt.com:
The June Chapter 7 liquidation of what had been a billion-dollar Southern California homebuilder has reached into San Diego County and hundreds of residential parcels from Black Mountain Ranch to Oceanside have been affected.
In its Chapter 11 reorganization bankruptcy filing in February, WL Homes LLC of Newport Beach said its sales volume in 2008 was cut by more than half from 2007’s $948 million.
The company listed $1.3 billion in assets and $977 million in debt as of Nov. 30, 2008.
WL Homes, with roots dating back 161 years, was formed in April 1998 when John Laing Homes, a British homebuilder, merged with Watt Homes — an entity founded by Los Angeles developer Ray Watt.
Watt was instrumental in building much of the housing in Fairbanks Ranch, and constructed such projects as San Diego Country Estates in Ramona and The Landing condominium complex in Coronado. Laing entered San Diego County in 2002, with projects such as the 219-home Tides at Water’s End in Carlsbad and the 86-home Woodley Hills in the San Elijo Hills master plan in San Marcos.
WL, which continued to market homes under the Laing banner after the merger, had explored the possibility of going public, but opted instead to remain private. It was then acquired in 2006 by Dubai-based Emaar Properties, one of the world’s largest global real estate development companies, for a reported $1.05 billion in cash. While Emaar has reportedly invested more than $600 million in the U.S. builder since the acquisition, it informed WL at the end of last year that unsecured financing Laing would no longer continue.
At the time of the February Chapter 11 filing, the homebuilder still held out hope the company might be saved, but defaults mounted and by early June the homebuilder filed a Chapter 7 liquidation request earlier this month.
While WL prepared itself for liquidation, Bank of America (NYSE: BAC) filed motions in Superior Court to foreclose on the planned 76-home Sentinels @ Del Sur development within the Black Mountain Ranch master plan. Black Mountain Ranch LLC, the master developer of Del Sur, was also named in the foreclosure. BofA is being represented by the Costa Mesa law firm of Snell and Wilmer LLP of Costa Mesa, which referred calls to BofA.
Fred Maas, Black Mountain Ranch president, said he believe his firm was named because BofA wants to be able to sell the remaining lots without the covenants, conditions and restrictions (CC&Rs) that run with the Sentinels property. He plans to fight the lender’s move.
“The CC&Rs are there for a reason. We want to keep a tight reign on Black Mountain,” Maas said, adding that Bof A has kept him in the dark as to what is happening with the property.
What hasn’t happened with the Sentinels are sales. Opened in August 2007, WL was only able to sell four homes through the first quarter of this year and, according to MarketPointe Realty Advisors, none of those sales came in 2009. The two- and three-bedroom homes were priced from $875,000 to $921,000.
According to Superior Court documents, WL, as of about three weeks ago, owed $9.33 million on what had been a $23.39 million construction loan from BofA that was secured by the Sentinels property. BofA officials would only say the Sentinels was working its way through the court process, but that the court had yet to appoint receiver.
The Sentinels was not the only project where WL was having trouble.
BofA revealed that a court appointed receiver is already in place for the Breakaway at Arrowood development, which had 130 homes planned in Oceanside. In that case, only 34 closings were recorded from September 2006 through the first quarter of this year, according to MarketPointe. Those four-bedroom homes were priced from $454,990 to $489,900.
Sometimes, as in the case of Silhouette, a 96-home development in 4S Ranch that got underway in March 2006, the sales got off to a strong start, only to fizzle later. While Silhouette managed to close 65, it still had the remainder to sell when WL filed Chapter 11.
Three other WL projects under the John Laing banner in San Diego County also had similar problems.
These include a planned 100-unit townhome property known as Palomar at St. Cloud that posted just 10 closed escrows since it started in September 2007. Two other projects were substantially reduced from their original sizes. The San Luis at St. Cloud development in Oceanside had 14 of 16 units sold through the first quarter of this year. The problem, according to MarketPointe, was the developer originally planned a 138-unit project.
The case was a similar one at Laing Luxury Village in the Crosby Estates master plan above Rancho Santa Fe that posted 32 closings out of 35 offered through the first quarter of the year. MarketPointe said that project at some point was cut in half from its original 70 units. WL’s developments also include two major projects in Orange County. One is a 575-home project built on the former Marine Corps Air Station in Tustin and the other is a 1,000-lot development in San Clemente.
With Bloomberg News