LandSource lender agent files plan of reorganization that calls for asset sale

By Caroline Salls

Pittsburgh, Oct. 14 - LandSource Communities Development LLC lender agent Barclays Bank plc filed a plan of reorganization for the company's Chapter 11 case, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The plan calls for the sale of LandSource's assets, with proceeds to be used to pay off the company's debtor-in-possession credit facility and distributed to creditors.

A liquidating trust will be established, and all remaining assets and causes of action will be transferred to the trust on the plan effective date.

Treatment of creditors will include:

• Holders of administrative expense claims, priority tax claims, permitted lien claims, priority non-tax claims and convenience claims will receive full payment in cash;

• The DIP facility will be paid in full on the plan effective date;

• Holders of DIP roll-up loan claims will be entitled to credit bid for the company's assets. To the extent that the credit bid does not repay the loan, these claims will be repaid from sale proceeds;

• Holders of second-lien secured claims will receive second-lien secured claim proceeds and will be entitled to credit bid for second-lien secured collateral at auction;

• Holders of other secured claims will receive other secured claim proceeds and will be entitled to credit bid for other secured collateral at auction;

• Holders of general unsecured claims will receive general unsecured claims proceeds; and

• Interests will be cancelled, and holders will receive no distribution.

Barclays has requested an additional 30 days to file the disclosure statement related to the plan.

According to the motion, the lender agent wants to include information in the disclosure statement that it does not currently have.

A hearing on the extension motion is scheduled for Nov. 5.

LandSource, a Los Angeles-based developer of master-planned communities, filed for bankruptcy on June 9. It Chapter 11 case number is 08-11111.

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