Emile Haddad’s Excellent LandSource Adventure
“Buy land, they’re not making it anymore.” Mark Twain said that.
Buy land; sell it for double what you bought it for; but keep rights to a third; and when it goes BK, buy the lion’s share back for pennies on the dollar. Where’s Mark Twain when you need him?
Well, inside the machinations that saw big black eyes for investors that included the likes of Barclay’s and the California Public Employees Retirement System (Calpers), there was derring-do on the ground by home builder Lennar’s chief land strategist Emile Haddad.
Big Builder senior editor Teresa Burney reports today on LandSource’s emergence from Chapter 11 bankruptcy protection. Somehow, all that land is still there, it’s just that the money that went into paying for it seems to have gone where the sun doesn’t shine.
Click image for news release on Newhall Land plan.
Management of the reorganized company will also provide a shot of déjà vu. Emile Haddad, Lennar’s mega California land dealmaker who engineered the original purchase of the LandSource assets by Lennar, will resign from his job at Lennar to head a new management company that will manage the Newhall Land Development assets. As part of the plan, Haddad would put $1 million of his own money into the company as a requirement and receive some ownership in the new company in return. The management company itself will have 2.5% interest in the new company.
Debra Dandeneau, an attorney for Weil, Gotshal & Manges who represented LandSource in the bankruptcy, said the company is happy to finally strike an agreement that was palatable to the company’s many creditors. It took the company, which filed for bankruptcy court protection June 8, 2008, nearly 14 months to navigate through the process.
“We are very pleased that all our key constituencies–our DIP lenders, our second lien lenders, and our trade creditors–ultimately came together to support the emergence of LandSource from bankruptcy,” she said late Monday via e-mail. “In this wave of restructurings, I believe this is the first real estate-oriented case that did not end up in liquidation.”
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