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Aristotle
Nitroglycerin


Joined: 05 Dec 2007
Posts: 594
Location: On a sand dune, sipping a cold soda

SunCal Takes 4 Controlled by Lehman Into Involuntary BK
PostPosted: Thu Nov 13, 2008 9:08 pm Reply with quoteBack to top

The SunCal Companies are "old school". Every project's ownership interests and mortgage loans are in a separate entity.

Last week, 14 SunCal entities, involving approximately 8 projects, filed voluntary Chapter 11 bankruptcies in the U.S. Bankruptcy Court for the Central District of California, Santa Ana branch court.

In an Emergency Motion for the lead case of those 14, the debtors' bankruptcy lawyer and SunCal's general counsel exposed what everyone had already figured out: That various Lehman entities had cut off development and construction funding for the SunCal projects in which Lehman entities were involved as lender. At least one of those lenders, Lehman ALI, Inc. is not a Chapter 11 debtor, raising the question of why funding was cut off.

The more interesting assertion by that bankruptcy lawyer in the Emergency Motion was that there were yet 9 more Lehman/SunCal development entities where a consent by a Lehman entity as equity owner was required for the filing of a voluntary Chapter 11 bankruptcy...and that Lehman was not giving that consent.

Today, the proverbial guacamole has hit the fan. Bruce Elieff, as Manager of SunCal Management LLC, as President of SCC Acquisitions, Inc., and as an individual, acting in the role of unhappy unsecured creditors, have joined with other project subcontractor creditors, and have filed 4 INVOLUNTARY Chapter 11 petitions against 4 Lehman/SunCal projects:

SunCal Heartland LLC 08-bk-17407-ES (Riverside County Project)
LB/L-SunCal Oak Valley LLC 08-bk-17404-ES (Riverside County Project)
LB/L-SunCal Northlake LLC 08-bk-17408-ES (Los Angeles County Project)
SunCal Marblehead LLC 08-bk-17409-ES (Orange County Project).

Given the fact that it's unusual for a developer to file an involuntary bankruptcy against himself, it seems that these 4 new cases represent part of the list of 9 Lehman/SunCal entities where the Lehman equity owner would not consent to the filing of a voluntary Chapter 11.

Four down, five to go? Who knows?

However, it is important to point out that there are many "SunCal Companies" controlled by the very brave Mr. Elieff which are not financed by Lehman, or co-owned by Lehman. According to The SunCal Companies' very active public relations representatives, those non-Lehman SunCal Companies are in fine shape.

In fact, some of those projects could be true Plums for SunCal and its subcontractors.

Many print and internet press reports just say "Lehman filed bankruptcy" and "SunCal filed bankruptcy", statements which are not completely true, because there is more than one Lehman and more than one SunCal.

In terms of public relations, The SunCal Companies might be smart to put out a press release listing projects and entities which have nothing, whatsoever, to do with Lehman...like the Alameda and Albuquerque SunCal projects.

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Aristotle

As Yogi Berra said "It's like deja vu all over again."

Last edited by Aristotle on Tue Feb 17, 2009 12:42 am; edited 1 time in total
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Aristotle
Nitroglycerin


Joined: 05 Dec 2007
Posts: 594
Location: On a sand dune, sipping a cold soda

More Details on 11/13 Involuntary Filings
PostPosted: Fri Nov 14, 2008 4:02 am Reply with quoteBack to top

Today, the Orange County Register, the Santa Clarita Signal and the Bakersfield Californian published stories on the four involuntary bankruptcies filed by The SunCal Companies management entities, and a few subcontractors, against the four entities named above.

See:

http://lansner.freedomblogging.....ente/6284/

http://www.the-signal.com/news/article/5936/

http://www.bakersfield.com/137/story/609120.html

The Californian got SunCal's spokesman to admit that the entities are 4 of the 9 entities where a Lehman controlled entity would have had to consent to the filing of a voluntary bankruptcy.

Both the Californian and the Register stories contain reference to The SunCal Companies having arranged $75 Million in debtor in possession financing for some or all of the 22 entities which are now in voluntary or involuntary bankruptcy. However, there are interesting questions relating to this yet-to-be finalized $75 Million DIP loan:

Will the consent be required from both the Lehman bankruptcy judge in New York, as well as the Lehman/SunCal bankruptcy judge in California, before the existing Lehman entities' first mortgage loans on the 22 entities' projects can be "primed" or forcibly subordinated to the new $75 Million DIP mortgage loan?

Will all of the requisite consents be obtained so that some of the $75 Million can be used to pay off the very angry pre-bankruptcy creditors who are project contractors and subcontractors?

Will the Chapter 11 Trustee for the 4 entities, which were subject to the September involuntary bankruptcy filings, be willing to share "jurisdiction" over the use of the $75 Million loan with The SunCal Companies' employees who "took a dive" and were silent when Lehman Brothers Real Estate Partners, L.P. so vehemently opposed the appointment of the Chapter 11 Trustee?

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Aristotle

As Yogi Berra said "It's like deja vu all over again."
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Aristotle
Nitroglycerin


Joined: 05 Dec 2007
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Location: On a sand dune, sipping a cold soda

SunCal Files 4 More Involuntary BKs Against Lehman LLCs
PostPosted: Tue Nov 18, 2008 6:47 pm Reply with quoteBack to top

On November 14, 2008 principals of The SunCal Companies convinced law firms, civil engineers and advertising agencies regularly doing business with the companies to join those principals as "Petitioning Creditors", to pull FOUR (4) more Lehman/SunCal entities into INVOLUNTARY bankruptcies. Once again, these four entities appear to be part of the nine (9) SunCal managed entities where Lehman affiliate(s) as equity owners would not consent to the filing of voluntary bankruptcies. It appears that only one (1) more anonymous recalcitrant entity remains to be discovered.

All four (4) of most recent the involuntary bankruptcies were filed with the U.S. Bankruptcy Court, Central District of California, Santa Ana branch, and assigned to Bankruptcy Court Judge Hon. Erithe Smith. Judge Smith is presiding over all of the other voluntary and involuntary Lehman/SunCal bankruptcy cases, now totalling 26 Chapter 11 cases.

The "most famous" of the four new alleged debtors is the Lehman/SunCal entity which out bid Donald Trump in frenzied bidding for a small piece of land in the City of Los Angeles located at the north east corner of the Century City neighborhood, immortalized in song by Tom Petty more than 20 years ago. The property overlooks the City of Beverly Hills commercial center and leafy "flats" residential neighborhood, which are subject to rigid height restrictions. Lehman/SunCal's plan was to construct an exotic looking, skinny 40 story hanging garden of Babylon style luxury condominium tower for international glitterati, flaunting Beverly Hills' height restrictions.

Saving the aesthetic sensibilities and privacy of Beverly Hills residents, for now, are petitioning creditors: Scott Baugh owed $15,000, SunCal Management, LLC owed $1,100,000 and SCC Acquisitions, Inc. owed $2,500. The alleged bankruptcy debtor is SunCal Century City, LLC Case 8:08-bk-17458-ES.

The three additional cases involve the following alleged debtors and petitioning creditors, with the dollar amount of the each petitioning creditor listed by its name:

Alleged debtor SunCal PSV, LLC - Case 8:08-bk-17465-ES. The petitioning creditors: Voss, Cook & Thel $9,000, SunCal Management, LLC $512,000 and SCC Acquisitions, Inc. $23,000

Alleged debtor SunCal Torrance Properties, LLC - Case 8:08-bk-17472-ES. The Petitioning Creditors: MWW Group, Inc., E. Rutherford, NJ, $42,000, SunCal Management, Inc. $148,000 and Sikand Engineering, Van Nuys, CA, $1,415

Alleged debtor Delta Coves Venture, LLC - Case 8:08-bk-17470-ES. The Petitioning Creditors: Weston Mason Marketing $35,000, Jackson DeMarco Tidus & Peckenpaugh $1,706, and SunCal Management, LLC $1,125,000

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Aristotle

As Yogi Berra said "It's like deja vu all over again."
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Justin
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Re: Discussion on SunCal Companies
PostPosted: Wed Nov 19, 2008 9:20 pm Reply with quoteBack to top

I wonder if we can officially move SunCal over the implosion list -- It'd be nice to be able to say something substantive as to how many total companies of theirs have been pulled into BK (like 20 out of ?). Assuming that's a majority, well, then that seems like a de facto implosion.

Just such a mess at this point.

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Pooge
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Re: Discussion on SunCal Companies
PostPosted: Thu Nov 20, 2008 5:33 pm Reply with quoteBack to top

There were some voluntary filings done yesterday:

http://www.tradingmarkets.com/.....s/2039318/

http://www.insidebayarea.com/timesstar/ci_11027515
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Aristotle
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Joined: 05 Dec 2007
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SunCal - Lehman BK Filings, It's Now 30 By Case Number Count
PostPosted: Tue Nov 25, 2008 12:51 am Reply with quoteBack to top

It's now up to 30 voluntary and involuntary cases, based on the following list of case numbers:

Earliest Involuntary Cased Filed by Unhappy Mechanics Lien and Junior Mortgage Creditors, where debtors admitted they are insolvent and Chapter 11 Trustee Now Controls Projects:

LBREP/L-SunCal Master I LLC - Case No. 08-bk-15588-ES (Lead Case for Motion Filing Purposes)
LBREP/L-SunCal McAllister Ranch LLC - Case No. 08-bk-15637-ES
LBREP/L-SunCal McSweeney Farms LLC - Case No. 08-bk-15639-ES
LBREP/L-SunCal Summerwind Ranch LLC - Case No. 08-bk-15640-ES

Voluntary Cases Filed by SunCal management:

Palmdale Hills Property, LLC - Case 8:08-bk-17206-ES (Lead Case for Motion Filing Purposes)
SunCal Beaumont Heights LLC - Case 8:08-bk-17209-ES
SunCal Bickford Ranch LLC - Case 8:08-bk-17231-ES
SunCal Communities I, LLC - 8:08-bk-17248-ES
SunCal Communities III, LLC - 8:08-bk-17249-ES
SunCal Emerald Meadows Ranch, LLC - 8:08-bk-17230-ES
SunCal Johannson Ranch, LLC - 8:08-bk-17225-ES
SunCal Summit Valley, LLC - 8:08-bk-17227-ES
SCC/Palmdale, LLC - 8:08-bk-17204-ES
Acton Estates, LLC - 8:08-bk-17236-ES
Seven Brothers, LLC - 8:08-bk-17240-ES
SJD Partners, LTD - 8:08-bk-17242-ES
SJD Development Corp. - 8:08-bk-17249-ES
Kirby Estates, LLC - 8:08-bk-17246-ES

First group of 4 Involuntary Cases Filed by SunCal management to avoid Lehman refusal-to-consent-to-voluntary-filing problem. Debtors have not yet admitted they are insolvent, so they are called "Alleged Debtors" for now:

SunCal Heartland LLC 08-bk-17407-ES
LB/L-SunCal Oak Valley LLC 08-bk-17404-ES
LB/L-SunCal Northlake LLC 08-bk-17408-ES
SunCal Marblehead LLC 08-bk-17409-ES

Second group of 4 Involuntary Cases Filed by SunCal management on 11/14 to avoid Lehman refusal-to-consent-to-voluntary-filing problem. Debtors have not yet admitted they are insolvent, so they are called "Alleged Debtors" for now:

SunCal Century City, LLC Case 8:08-bk-17458-ES
SunCal PSV, LLC - Case 8:08-bk-17465-ES
SunCal Torrance Properties, LLC - Case 8:08-bk-17472-ES
Delta Coves Venture, LLC - Case 8:08-bk-17470-ES

More voluntary cases filed 11/19/08:

Tesoro SF, LLC - Case 8:08-bk-17523
SCC Communities LLC - Case 8:08-bk-17572
North Orange Del Rio Land, LLC Case 8:08-bk-17574

Involuntary case filed 11/19/08 to avoid Lehman refusal-to-consent-to-voluntary-filing problem. Debtor has not yet admitted they are insolvent, so they are called an "Alleged Debtor" for now:

SunCal Oak Knoll, LLC, Case 8:08-bk-17588

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Aristotle

As Yogi Berra said "It's like deja vu all over again."

Last edited by Aristotle on Tue Feb 17, 2009 12:43 am; edited 1 time in total
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Aristotle
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Joined: 05 Dec 2007
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Location: On a sand dune, sipping a cold soda

The SunCal Companies' Key Entities Are Not Dead Yet
PostPosted: Tue Nov 25, 2008 1:24 am Reply with quoteBack to top

Justin said: "I wonder if we can officially move SunCal over the implosion list -- It'd be nice to be able to say something substantive as to how many total companies of theirs have been pulled into BK (like 20 out of ?). Assuming that's a majority, well, then that seems like a de facto implosion. Just such a mess at this point."

Justin, the people who run SunCal are old school. They put every project into a separate entity. In each separate entity, there are usually two owners, one "financier" like a Lehman entity or a D. E. Shaw & Co. entity, and one SunCal entity. In turn, that "parent" SunCal entity may be owned by yet another entity wholly controlled by the humans who run SunCal.

In addition, SunCal appears to have 2 or 3 entities which manage projects. In addition, they probably have a separate entity which has a general contractor's license.

As a result, The SunCal Companies cannot be considered "Imploded" or even "DeFacto Imploded" until the general contractor, management companies, and two tiers of "parent" companies are all in Chapter 11.

Those ownership, management and construction entities are involved with SunCal's projects in Alameda and Albuquerque, allegedly financed by D. E. Shaw & Co., not Lehman. Those projects are not in any financial trouble as far as anyone can tell.

As long as the management companies and general contractor entities still have money coming in the door, they will continue to operate both the entities in which D. E. Shaw has invested and the entities where they are running the Chapter 11 Debtors in Possession.

To me, the "mother ship" is not imploded or even defacto imploded until the management and contractor entities literally shut off their phones or until a Chapter 11 trustee takes over those management and contractor entities.

In the recession of the early 1980's, I once worked on a rescue operation for a troubled homebuilder where the "family tree" of entities was drawn on 3' X 15' of butcher paper taped up on my office wall. Here we are, 26 years later and the "parent" of all of those companies is still in ...because the old school approach of putting each project in a separate entity, and not signing completion guarantees or payment guarantees actually works in the long term.

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Aristotle

As Yogi Berra said "It's like deja vu all over again."
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underground home looker
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Location: L A county ca.

Suncal
PostPosted: Thu Feb 23, 2012 12:14 am Reply with quoteBack to top

Well here it is 4 years later on the other side of the recession/crash

And Suncal's Delta Coves still remains unchanged-fenced off, I've read on the internet that some of the docks have floated away.

Oh development folly and overambitiousness-a project like this shoulda never happened in the first place!!!!!!!!!!

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