LakePoint Land files Chapter 11 bankruptcy, reaches deal with Rimrock

By Caroline Salls

Pittsburgh, June 13 – LakePoint Land, LLC filed Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the Northern District of Georgia.

According to a statement filed with the court by chief financial officer and sole manager Robert Zurcher, in early 2015, covenant defaults occurred under a 2014 loan agreement, and the company, the loan guarantors and Rimrock Capital Management entered negotiations to modify the terms of the loan agreement and waive the default.

The loan agreement and waiver were reached in July 2015. The loan was modified a total of eight times, and a forbearance agreement was reached in December 2016.

During the last few months, Zurcher said the LakePoint debtors and Rimrock held negotiations to come up with a plan to enable the debtors to adjust their balance sheets while allowing legacy investors to retain an equity interest in LakePoint Land.

Those negotiations resulted in a restructuring support agreement.

DIP financing

Under the restructuring support agreement, the company will seek court approval to obtain up to $5 million in debtor-in-possession financing.

The Rimrock affiliate will serve as the DIP financing lender.

Interest will accrue at a rate of 12%.

On, and subject to the occurrence of, the plan effective date, the DIP lender will receive the proceeds of an exit facility and class B-1 membership units in a new holding company in an amount equal to the outstanding DIP facility obligations in excess of $2 million as of the effective date.

Restructuring terms

In partial consideration for its receipt of class A and class B membership units, the Rimrock affiliate will contribute to the reorganized debtors land that was transferred to it on Nov. 3, 2016 in connection with deeds in lieu, a 2.2-acre parcel of land purchased by a Rimrock affiliate for $1.71 million, if acquired by Rimrock or an affiliate, a 6.058-acre parcel of land to be purchased for $450,000 and a commitment to contribute to Bartow County or one or more approved contractors, at least $2.39 million in connection with a supplemental funding agreement.

Holders of other secured claims will either be paid in full in cash, receive the proceeds from the sale of the collateral securing the claims, receive the collateral securing the claims or another agreed distribution.

General unsecured claims will be reinstated and paid in full in cash.

Intercompany claims will be reinstated or cancelled and discharged.

Holders of affiliate note claims will receive a share of class E membership interests.

Holders of terminated memoranda of understanding claims will receive new class F membership interests.

Holders of existing preferred member interests will receive a share of class C membership interests.

Holders of existing common member interests will receive a share of class D membership interests.

Existing equity held by Rimrock will be cancelled with no distribution.

Debt details

According to court documents, LakePoint Land has $100,000 to $500,000 in assets and $50 million to $100 million in debt.

The company’s largest unsecured creditors are Sport Parks of Georgia, LLC of Powder Springs, Ga., with a $1.07 million intercompany payable claim, and Wilwat Properties, Inc. of Atlanta, with a $1.02 million intercompany payable claim.

An affiliate of Rimrock holds an 8.5019% ownership interest in LakePoint.

The company is represented in the Chapter 11 cases by Arnall, Golden, Gregory LLP.

Emerson, Ga.-based LakePoint Land operates a vacation sports destination. The Chapter 11 case number is 18-41337.

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