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Newhall Land's debt looms

• Company tries to renegotiate $1.24 B in loans.

Posted: May 1, 2008 1:30 a.m.
Updated: July 2, 2008 5:03 a.m.
Despite speculation throughout the financial community that the Newhall Land and Farming Co.'s owner is on the verge of bankruptcy, officials with the Valencia builder remained tight-lipped this week.

"There's been lots of speculation," Newhall Land spokeswoman Marlee Lauffer said Wednesday. "The owners of our company ... are still in discussions."

LandSource Communities Development LLC, Newhall Land's parent company, has been involved in negotiations to restructure its debt over the last few weeks.

LandSource's forbearance agreement expired on April 16, and the debt negotiations have involved a reported $1.24 billion in loans.

The partnership reportedly received a default notice early last week.

LandSource is comprised of Lennar Corp., LNR Property Corp. and MW Housing Partners, which is co-managed by MacFarlane partners and includes the California Public Employees' Retirement System.

Standard and Poor's reported Tuesday that a bankruptcy filing is expected within two to three weeks, likely prompted by a shortage of cash.

Asked Wednesday what, if any, kind of preparations have been made for the possibility of Newhall Land's owner going bankrupt, Lauffer said:

"I'm not going to respond to speculative questions.

"There are a variety of different options that are (under consideration)."

With some 15,000 acres and 23,000 homes, Newhall Land is LandSource's primary investment. LandSource was formed in 2007.


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