Bankruptcy-foreclosure-and-problem-projects

Report includes video segment.

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As the fire danger goes up, neighbors of the old Oakland Naval Hospital are concerned because dry weeds are growing dangerously high on the site.

Ever since the hospital was closed in 1996, neighbors have complained every summer to get the grass cut, and this year is no exception. Currently waist-high grass dominates the property.

Financial problems prevented SunCal companies from developing the property but it's still responsible for keeping it clean and safe.

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A bankruptcy judge has denied SunCal Co.'s request to block Lehman Brothers Holdings Inc. (LEHMQ) from closing a deal to buy back $1.5 billion in loans from affiliate Fenway Capital LLCLimited Liability Corporation pending an appeal.

The ruling by Judge James Peck of the U.S. Bankruptcy Court in Manhattan is a blow to SunCal, which had hoped to prevent the repurchase of seven loans that are at the center of a long-running dispute between the developer and the failed investment bank over stalled California real-estate projects.

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Criminal charges may eventually be filed against the owners of a vacant lot turned illegal dump along Teal Club Road in Oxnard.

The problem is figuring out who is responsible for it.

The owner of the property claims it is in bankruptcy court and the parcel is now the responsibility of a trustee. But that person denies being the trustee for the property.

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A 55,000-acre tract of land on the western edge of Albuquerque scheduled for development by Westland DevCo LP was placed in receivership based on the creditor's claims on the unpaid loan balance, a judge ruled from the bench last week.

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SunCal Cos. said it appealed a bankruptcy judge’s decision that halted the company from wiping out Lehman Brothers Holdings Inc.’s liens on a group of California real-estate projects.

Page one story
Albuquerque Journal
May 20, 2010

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A federal judge in Delaware last week threw out a bankruptcy claim filed by Westland DevCo, a limited partnership formed between D.E. Shaw and SunCal Cos. to develop a 55,000-acre parcel west of Albuquerque into a master planned community.

...

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May 12 (Bloomberg) -- Lehman Brothers Holdings Inc., fighting to preserve its stake in a group of bankrupt California real-estate projects undertaken with SunCal Cos., won court permission to buy back $1.5 billion in loans tied to the properties.

U.S. Bankruptcy Judge James Peck in Manhattan, who is overseeing Lehman’s bankruptcy case, today approved Lehman’s purchase of the loans, previously sold to Fenway Capital LLCLimited Liability Corporation. The transaction represented a suitable exercise of Lehman’s “business judgment,” Peck said.

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Legal wrangling, rather than construction work, appears likely to be the biggest near-term source of activity at Irvine-based SunCal Cos.’ largest proposed project, a 55,000-acre development planned just outside Albuquerque, N.M.

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Opponents of a state-backed tax scheme to help develop a parcel of land on Albuquerque’s West Mesa say they aren’t surprised by news that the company behind the plan has filed for bankruptcy.

Here’s a copy of the bankruptcy filing.

“What we all said was going to happen and what we knew was going to happen finally happened,” said Rep. Ben Rodefer, a Democrat from Corrales. “They were not viable financially and not of the caliber we should want to be in a relationship with.”