East West Partners bankruptcy: Gray’s Crossing, Old Greenwood could be sold
March 18, 2010
TRUCKEE, Calif. and#8212; The possible sale of Grayand#8217;s Crossing, Old Greenwood and their respective golf courses are part of a six-month, $10 million reorganization plan for East West Partners, which filed for Chapter 11 bankruptcy protection earlier this year.
According to East West Partners, British banking and investment company Barclays recently put up a $10 million debtor-in-possession loan, intended to provide funding for East West to continue conducting business during its reorganization.
and#8220;Barclays currently owns Grayand#8217;s Crossing and Old Greenwood real estate and golf courses,and#8221; said Blake Riva, managing partner with East West Partners. and#8220;If there is a bidder for these assets, Barclays will consider the bid and will make a determination as to whether to accept the bid and sell the asset, or reject the bid and continue to own the asset.and#8221;
Barclays will decide whether they want to accept or reject those offers during the week of April 5, Riva said.
East West Partners would re-emerge from Chapter 11 reorganization June 30, according to the plan. It filed for bankruptcy protection on Feb. 16.
The new Ritz Carlton Highlands, Lake Tahoe, and the Hyatt Vacation Club, are not affected by the bankruptcy filing, nor is Northstar-at-Tahoe, which is under separate ownership.
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After water quality violations dating back to the 2006 construction season at the Village at Northstar, East West Partners faced a maximum of $12.6 million in fines from the Lahontan Regional Water Quality Control Board, according to previous Sierra Sun reports.
East West and Lahontan reached a $2.75 million settlement in 2009 that would be used for environmental projects in the Martis Valley and#8212; including erosion prevention measures in Waddle Ranch and the creation of new standard practices for similar environmental projects.
With East Westand#8217;s Chapter 11 filing, Harold Singer, executive officer of Lahontan, said those projects are on hold.
and#8220;… we will not pay for any further work until we know what is happening to the funding,and#8221; Singer said. and#8220;We wonand#8217;t put in money we donand#8217;t know we have.and#8221;
Riva said Lahontan is one of East Westand#8217;s unsecured creditors, so a bankruptcy court will ultimately decide how much Lahontan is paid.
and#8220;Itand#8217;s understandable the water board feels the need to pause things,and#8221; said Lisa Wallace, executive director of the Truckee River Watershed Council.
Perry Norris, executive director of the Truckee Donner Land Trust, said the decision will have a significant impact to Martis Valleyand#8217;s open space.
However, transfer fees paid by real estate sales from East West projects secured in settlements with the Mountain Area Preservation Foundation donand#8217;t appear to be threatened, Norris said.
and#8220;Itand#8217;s helpful funding that has funded a number of projects like Billy Mach Canyon, Hippie Hill, parts of the Donner Lake Rim Trail and Waddle Ranch,and#8221; Norris said. and#8220;But it tracks with real estate sales, so it was more substantial when the market was red hot.and#8221;
Furthermore, the Truckee Donner Public Utility District is retaining legal counsel to protect the districtand#8217;s financial interests during bankruptcy proceedings, said Steven Poncelet, public information and conservation manager for the district. East West is one of the districtand#8217;s larger customers.