William Lyon Homes' restructuring support, rights offering approved

By Jim Witters

Wilmington, Del., Dec. 29 - William Lyon Homes received court approval Thursday for its restructuring support agreement and its backstopped rights offering.

During a hearing in the U.S. Bankruptcy Court for the District of Delaware, judge Christopher Sontchi approved the measures, which the debtor submitted in its pre-packaged Chapter 11 bankruptcy.

There were no objections at the hearing.

Plan terms

As previously reported, under the pre-packaged plan

• The Lyon family will invest $25 million in exchange for 20% of the reorganized company's common equity and warrants for an additional 9.1% of common equity;

• The company's senior secured lender will receive a $235 million secured note;

• Senior noteholders will exchange $284 million principal amount of existing notes for $75 million of secured notes and will receive 28.5% of common equity;

• The rights offering is for $10 million of common equity and $50 million of new convertible preferred equity, together representing 51.5% of the common equity; and

• In connection with the exchange and rights offering, the existing equity of the company will be canceled, and William Lyon Homes will issue to the holders of its existing equity, in exchange for a purchase price of $25 million in cash, shares of class B common stock initially representing 20% of the capital stock and warrants to purchase an additional 9.1% of the class B common shares at a strike price based on a $325 million equity value of the company, the 8-K said.

Debtors attorney Laura Davis-Jones said the rights offering is backstopped by Luxor Capital Group LP.

Should the rights issue be undersubscribed, Luxor will buy all the remaining shares, Davis-Jones said.

Hearings scheduled

A hearing on the final $30 million DIP credit facility is scheduled for 11 a.m. ET on Jan. 11.

The hearing on the motion to approve the disclosure statement and confirm the debtor's plan of reorganization is scheduled for 1 p.m. ET on Feb. 10.

The Newport Beach, Calif.-based company designs, constructs and sells single family detached and attached homes in California, Arizona and Nevada. The Chapter 11 case number is 11-14019.

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