Lake at Las Vegas agrees reorganization plan with creditors committee, bank lenders

New York, Sept. 4 - Lake at Las Vegas Joint Venture, LLC said it reached agreement on a term sheet with its official committee of unsecured creditors, the agent for its debtor-in-possession facility and its pre-bankruptcy facility, and with some lenders on each loan.

The term sheet will provide the basis for a plan of reorganization, the company said.

Under the proposed restructuring, the DIP financing, including the unspent portion, will be contributed to the reorganized company as capital in exchange for the predominant share of its equity.

The new company will also have access to an additional $10 million in financing from one or more of the existing DIP lenders.

The primary pre-bankruptcy secured lenders will receive a minority equity interest in the reorganized company and a share of litigation claims that will be preserved under the plan and transferred to a creditors' trust.

General unsecured creditors will receive their share of a designated fund together with a share of the litigation claims transferred to the trust.

The plan is also expected to make provision for the completion of certain work financed by local improvement district bonds. The completion of this work would not only enhance the development but would also create a fund to provide for payments to vendors who performed pre-petition services in connection with the relevant infrastructure work, Lake at Las Vegas said.

"The company, the agents and the creditors' committee have worked hard to develop the foundation for a plan of reorganization that strikes a fair and reasonable compromise for all stakeholders while enabling reorganized Lake Las Vegas to succeed as the real estate market recovers," said Frederick Chin, Lake at Las Vegas president, in a news release.

The company anticipates that the disclosure statement for the plan will be considered by the U.S. Bankruptcy Court for the District of Nevada at a hearing scheduled for Oct. 15.

Lake at Las Vegas Joint Venture LLC, a 3,592-acre master-planned residential and resort community, filed for bankruptcy on July 17, 2008. Its Chapter 11 case number is 08-17814.

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