WL Homes settlement cuts ResCap trust unsecured claims to $90 million

By Caroline Salls

Pittsburgh, Nov. 25 – WL Homes, LLC Chapter 7 trustee George L. Miller requested court approval of a settlement reached with the ResCap Liquidating Trust, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Miller said the proposed settlement resolves his objections to claims filed by Equity Investment I, LLC, RC Properties XV III, LLC and RFC Construction Funding, LLC and calls for approval of a carve-out for asset sales. The trust is the assignee and owner of the claims filed by all three entities.

Under the settlement:

• An $8.8 million claim will be reduced and allowed as an $8 million general unsecured claim;

• A $20.41 million claim will be reduced and allowed as a $14 million general unsecured claim;

• A $59.8 million claim will be reduced and allowed as a $50 million general unsecured claim;

• A $22.9 million claim will be reduced and allowed as an $18 million general unsecured claim;

• The trustee will make a $2.34 million initial interim distribution to ResCap, representing 2.6% of the allowed claims amount. After that, the trustee will make subsequent distributions to ResCap on account of its total allowed unsecured claims of $90 million when subsequent distributions are made to the holders of allowed general unsecured claims; and

• To the extent the trustee administers property in which ResCap has a valid recorded lien, upon the assets being administered, the WL Homes estates will be paid from the gross proceeds all of its fees and costs directly related to the marketing and sale of the property, and the balance of the remaining net proceeds will be split, with ResCap receiving 70% on account of its secured claim and the WL Homes’ estates receiving 30%.

A hearing is scheduled for Dec. 16.

WL Homes, an Irvine, Calif.-based homebuilder, filed for bankruptcy on Feb. 19, 2009. Its Chapter 11 case number is 09-10571.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.