An involuntary bankruptcy petition has been filed against a partnership of Irvine-based developer SunCal Cos. and one of its biggest financiers, Lehman Brothers Holdings Inc. of New York.
Petitions also were filed against three of the SunCal-Lehman partnership’s larger planned developments, in Bakersfield and Riverside County, which have been slated for auction.
A group of investors or creditors can file a bankruptcy petition if they contend a company has failed to pay debts or if a company’s own bankruptcy appears near.
The news came days before Lehman filed for bankruptcy on Monday after failing to secure a buyer or a government bailout.
Creditors of the SunCal-Lehman partnership, including a division of New York-based lender Gramercy Capital Corp., initiated the Chapter 11 filings, which were filed on last Wednesday in U.S. Bankruptcy Court for the Central District of California.
The creditors listed in the cases,which include construction and engineering companies, along with Gramercy,said they are owed about $3 million by the partnership and affiliated development entities.
The four cases were assigned to the bankruptcy court’s Santa Ana division.
It’s unclear if Gramercy is an investor in any other SunCal projects or if other investors will follow suit.
Along with the master Lehman-SunCal partnership, the involuntary petitions target three stalled SunCal developments that Lehman has invested in or is a lender on.
Those projects include McAllister Ranch, a 6,000-home development near Bakersfield, and two other SunCal projects in Riverside County; the 1,600-home McSweeney Farms project in Hemet, and the 3,683-home Summer Wind Ranch project in Calimesa.
In April, SunCal defaulted on a loan for McAllister Ranch, a golf course development that saw construction stop last year. Debt on McAllister Ranch is tied to the two Riverside County projects.
After at least one postponement, the three developments were at last check scheduled for a foreclosure auction last Friday. Officials for SunCal said in recent weeks that they were in talks with Lehman to restructure the loans, which could lead to the auction being canceled or postponed.
The bankruptcy petitions were filed days before the three developments were slated to go to auction, likely postponing the foreclosures for the time being.
Filings are said to be common if the debtor is transferring its assets to a related company or a successor company, which Lehman last week proposed for the bulk its commercial real estate assets, including its holdings in SunCal.
Lehman wrote down its investment in SunCal from $2.2 billion to $1.6 billion earlier this year. Last week, officials said future writedowns in its commercial real estate holdings were unlikely, as it announced the spinoff plans.
