Lake at Las Vegas Joint Venture plan of reorganization to be confirmed

By Caroline Salls

Pittsburgh, June 23 - Lake at Las Vegas Joint Venture, LLC's plan of reorganization will be confirmed by judge Linda B. Riegle, according to Tuesday evening news release.

The plan was proposed by the company and its official committee of unsecured creditors.

The company said it expects to emerge from Chapter 11 bankruptcy "shortly."

"We are delighted by the court's decision today and look forward to emerging from Chapter 11 as a restructured going concern with a clean balance sheet," chief executive officer Frederick E. Chin said in the release.

"This restructuring process has been extremely complex, and at times, heavily contested, and we appreciate the patience and cooperation of the various constituents, including homeowners, landowners, and vendors.

"The debtors and the committee worked very hard to develop a consensual plan of reorganization that would have broad support, and we are gratified that we were able to achieve overwhelming creditor approval and resolve every objection to the plan's confirmation."

Lake at Las Vegas said it will remain under the stewardship of The Atalon Group LLC, which will provide asset management services to and for the benefit of the reorganized company. Atalon Group principals Chin and James Coyne will continue in their current roles as project managers through Dec. 31, 2011.

Under the plan, Lake at Las Vegas will sell much of its remaining land in phases I and II of the project over the next two years and focus its efforts on the long-term development of phase III.

In addition, the company said the plan provides for exit financing to cover operating expenses, fund plan obligations and finance T-16 local improvement district developments.

Lake at Las Vegas said funding for continued subsidy payments to the Lake Las Vegas Master Property Owners Association, LID assessments and property taxes will continue, allowing the company to satisfy its ongoing obligations as a landowner and as master developer.

The plan also provides for the establishment and funding of an independent creditor trust to prosecute avoidance actions and claims against former insiders. Larry Lattig of Mesirow Financial will serve as the trustee.

Creditor treatment

Treatment of creditors will include:

• Holders of pre-bankruptcy lender claims will receive 1% of the equity of the reorganized company and warrants to purchase up to 25% of the equity to be triggered as the recovery to debtor-in-possession lenders exceeds specified benchmarks. These creditors will also receive 80% of net litigation claim proceeds;

• Holders of debtor-in-possession lender claims will receive a share of 94% of the membership interests in reorganized LLV Holdco;

• Holders of mechanics lien claims will receive either a secured note to be paid over three years or the collateral securing the claim; and

• Holders of general unsecured claims will receive a share of $1 million in cash and up to 10% of net litigation claim proceeds.

Lake at Las Vegas Joint Venture LLC, a 3,592-acre master-planned residential and resort community, filed for bankruptcy on July 17, 2008 in the U.S. Bankruptcy Court for the District of Nevada. Its Chapter 11 case number is 08-17814.

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