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Westland Devco files bankruptcy after loan restructuring talks fail
By Caroline Salls
Pittsburgh, April 5 - Westland Devco, LP filed for Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of Delaware.
Westland Devco is developing roughly 55,000 acres of property in Albuquerque, N.M., with plans to build a new town within the city, including residential, commercial and industrial areas with new schools, an arts and cultural district and other amenities.
According to a statement filed by Westland Holdco, Inc. executive vice president, secretary and general counsel Bruce V. Cook, the company's $312.32 million project loan from Barclays Capital Real Estate, Inc. matured on July 16, 2009. As of Monday, there was $181.78 million outstanding on the loan.
Since the loan matured, Cook said Westland and Barclays had been in restructuring talks, which were complicated by a complex intercreditor agreement that requires an elaborate appraisal process to determine which lender has the authority to direct Barclays, as agent, to negotiate or file a lawsuit.
As a result, no restructuring agreement was reached.
In January, Cook said Barclays filed a lawsuit against Westland in an attempt to foreclose its mortgage on the project. In addition, Barclays filed a motion for appointment of a receiver in February.
Cook said the company filed for bankruptcy "in order to avoid the expense, distraction and uncertainty of litigation," as well as to restructure the outstanding debt.
According to court documents, Westland Devco had $360.61 million in assets and $197.58 million in debt as of Dec. 31.
The company did not list any unsecured creditors with claims of $1 million or more.
Westland Devco is based in Albuquerque, N.M. The Chapter 11 case number is 10-11166.
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