CALC Announces Voluntary Filing for a Plan of Reorganization to Extend Maturity Dates of Brightwater Credit Facilities
October 28 2009 - 7:30AM
PR Newswire (US)
-- Company is continuing ongoing negotiations with its lenders for
approval of the restructuring plan -- Company will continue normal
homebuilder and sales operations IRVINE, Calif., Oct. 28
/PRNewswire-FirstCall/ -- California Coastal Communities, Inc.
(NASDAQ:CALC) announced today that the Company and certain of its
subsidiaries have filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in order to extend the
maturity dates of approximately $182 million of indebtedness
related to the Company's Brightwater development project and to
modify and eliminate certain debt covenants. The petitions were
filed on October 27, 2009 in the U.S. Bankruptcy Court in the
Central District of California. Raymond J. Pacini, the Company's
Chief Executive Officer commented, "We have been negotiating for
some time in the hopes of getting 100% of our syndicate lenders to
agree to extend the maturity dates and change the repayment
schedules so we could repay the debt in full in 2013 based on our
current expectations for home sales over the next four years.
Unfortunately, without unanimous approval we have no viable
alternative but to restructure the debt through the voluntary
reorganization process we are pursuing." Mr. Pacini also noted
that, "We believe the effect of the financial crisis on banks has
made negotiating through the courts commonplace. The actions we are
pursuing are the most efficient means available to us to negotiate
a timely and consensual balance sheet restructuring with our core
lenders. This action is a financing tool for our Company,
implemented to address our liquidity issues. We intend to continue
operating 'business as usual' during the reorganization process and
anticipate no interruption in our homebuilding or sales activities.
We will continue to deliver homes on schedule and honor all
customer warranties. The building and sale of homes will be
unaffected by this restructuring process. "We re-organized the
company's finances through a similar process in 1997 and emerged
with a stronger balance sheet and the ability to secure the
entitlement of our Brightwater project. Today, we intend to create
a better balance between the steady pace of sales at Brightwater
and the repayment schedule of our long-term debt." The Company has
been engaged in extensive negotiations with its lenders regarding a
consensual out-of-court restructuring plan. Given the progress that
has been made in these negotiations, the Company is hopeful that it
will be able to quickly obtain the consent of a substantial
majority of its lenders for a consensual restructuring that can be
approved by the bankruptcy court as quickly as possible. During the
quarter ended September 30, 2009 the Company's Brightwater project
in Huntington Beach, California generated 15 net new sales orders
compared with six net new orders in the comparable quarter of 2008,
11 net new orders in the second quarter of 2009 and five net new
orders in the first quarter of 2009. The Company has delivered a
total of 70 homes to date, has 17 homes in backlog, 12 inventory
homes available for sale, and 257 finished lots. The aggregate
sales value of the 17 Brightwater homes in backlog is $20.8 million
as of October 26, 2009. The Company is a residential land
development and homebuilding company operating in Southern
California. The Company's principal subsidiaries are Hearthside
Homes which is a homebuilding company, and Signal Landmark which
owns 105 acres on the Bolsa Chica mesa where sales commenced in
August 2007 at the 356-home Brightwater community. Hearthside Homes
has delivered 2,200 homes to families throughout Southern
California since its formation in 1994. Safe Harbor Statement under
the Private Securities Litigation Reform Act of 1995 Certain of the
foregoing information contains forward-looking statements that
relate to future events or the Company's future financial
performance. These statements involve known and unknown risks,
uncertainties and other factors which may cause the Company's
actual results, performance or achievements to be materially
different from any future results, performances or achievements
expressed or implied by the forward-looking statements. In some
cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or
the negative of such terms or other comparable terminology. These
forward-looking statements include, but are not limited to,
statements about the Company's plans, objectives, goals,
expectations and intentions, the number and types of homes and
number of acres of land that the Company may develop and sell, the
timing and outcomes of any such development, the timing and
outcomes of court proceedings, lender negotiations, regulatory
approval processes or administrative proceedings, cash flows or
sales, and other statements contained herein that are not
historical facts. DATASOURCE: California Coastal Communities, Inc.
CONTACT: Raymond J. Pacini, Chief Executive Officer, California
Coastal Communities, Inc., +1-949-250-7781
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