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SunCal Bankruptcy Filing for Albuquerque, New Mexico, Project Dismissed by Delaware Court

A Delaware bankruptcy court has dismissed a bankruptcy filing by SunCal intended to fend-off foreclosure by Barclay’s Bank on their Albuquerque, New Mexico project. Depending on the ownership structure of the project, this dismissal may have implications for SunCal’s plans for Alameda Point.

SunCal had created a special legal entity, Westland DevCo, LP to run their huge development project in Albuquerque, New Mexico. In December of last year, the project lenders, including Barclay’s Bank, pushed the project into foreclosure, because SunCal was unable to make loan payments. In April of this year, Action Alameda News reported that SunCal had filed bankruptcy for Westland DevCo LP, presumably as a parry to Barclay’s foreclosure thrust; a drawn-out bankruptcy proceeding would delay Barclay’s attempt to foreclose on the project.

Earlier this week, on May 10th, Judge Christopher S. Sontchi, with the United States Bankruptcy Court in Delaware, where Westland DevCo LP was organized, issued a ruling dismissing SunCal’s bankruptcy filing for Westland DevCo LP. That might have impacts for SCC Alameda Point, LLC, SunCal’s special entity created to manage their proposed Alameda Point development, depending on the complex and secretive structure of the various entities operating under the name “SunCal Companies.”

Sources tell Action Alameda News that if SCC Acquisitions Inc. ultimately has an ownership in Westland DevCo, LP, filing bankruptcy for that entity may be SunCal’s next step to attempt to halt the New Mexico foreclosure. Such a filing might also help SunCal fend off an attempt by the mysterious “Gray 1 CPB LLC” real estate fund out of San Diego to seize SCC Acquisitions Inc. and Bruce Elieff’s assets.

Should SCC Acquisitions Inc. hold an interest, however far removed, in SCC Alameda Point LLC, control of the Alameda Point project might fall to whoever gains control of the parent company SCC Acquisitions, Inc., subsequent to work-out plans approved by the bankruptcy court; and there’s no guarantee that would be SunCal.

SunCal isn’t talking – they haven’t been responding to media inquiries from Action Alameda News.

Here is a copy of the Delaware court ruling regarding the New Mexico bankruptcy:

Albuquerque104CaseDismissed

5 comments to SunCal Bankruptcy Filing for Albuquerque, New Mexico, Project Dismissed by Delaware Court

  • Barb

    Let me guess. . . . . did SUNCAL Westland DevCo LP have an Exclusive Negotiating Agreement with Albuquerque, New Mexico?

  • dlm

    Barb: Not an ENA, no.

    SunCal and Shaw formed Westlands DevCo LP as a partnership, and Westlands bought the Albuquerque land (55,000 acres) outright for ~$200M, with a loan from Barclays Bank. So it was NOT (N-O-T) Shaw that provided the financing, but a third party.

    Westlands then sought redevelopment financing, which in New Mexico has to be approved by the state legislature, and after a long, expensive campaign, Westlands lost. They did not get the financing which was evidently essential to their project.

    Sometime shorly thereafter, the mortgage came due in full, all ~$200M, to Barclays Bank. Shaw decided that the project would be unprofitable w/out the redev financing, so basically, they walked. The refused to cover the mortgage payment.

    So Barclays then decided to foreclose on the project, and WestLands then attempted to stall the foreclosure by declaring bankruptcy (in a Delaware court). As explained above, the Bankruptcy Judge ruled the bankruptcy filing _by Westlands_ as not valid and dismissed it. (It appears that a bankruptcy filing by the SunCal parent company would be valid, tho.)

    So now, Barclays will proceed w/ the foreclosure, Albuquerque will be stuck dealing w/ Barclays, on who knows what terms, and the former owners of the property (who sold to Westlands) will be left without any of the long-term benefits promised to them.

    It’s a lose-lose for virtually everyone except Barclays Bank. Neither SunCal nor Shaw were willing or able to conduct this deal in a responsible, competent fashion.

    It also means that the status of the SunCal parent company is even more questionable than it was previously. The parent company may in fact file bankruptcy. One has to ask why we continue to carry on “negotiations” with a business partner who is so obviously unfit. They just lost a key legal ruling to Lehman, and their plan for pulling their other projects out of bankruptcy is now in serious doubt.

  • Barb

    Unfortunately the terms of the ENA keep us in bed with unfit, incompetent and broke scoundrels. Uggggg! Too bad SUNCAL can’t just be washed away like a bad dream and let Alameda get on with whatever we decide to do at the point.

    Obviously the smell of money keeps SUNCAL “believing” that it is really in Alameda’s best interest to submit to such an ongoing unwanted atrocity. Only Auschwitz and Berkinow come to mind when I try to come up with something as bad as SUNCAL.

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