LandSource bankruptcy filing seen in weeks-report

NEW YORK (Reuters) - LandSource Communities Development LLC, a large California land and development company, is expected to file for bankruptcy protection in the next two to three weeks, a Standard & Poor's publication reported on Tuesday, attributing the information to unnamed lenders.

S&P's Leveraged Commentary & Data reported on its Web site, www.lcdcomps.com, that the company's cash had declined to about $25 million from about $115 million in early February. An article on the Web site, citing unnamed sources, said a bankruptcy filing would help preserve cash and start a process to sell assets.

A LandSource spokeswoman did not return calls for comment.

LandSource had received an official notice of default on a $1 billion loan after it failed to meet certain terms of its lenders, the Wall Street Journal reported last week.

LandSource is a joint venture between home builder Lennar Corp (LEN.N), LNR Property Corp, which each have a 16 percent stake and MW Housing Partners, which holds a 68 percent stake.

MW Housing Partners, is co-managed by a Weyerhaeuser Co (WY.N) subsidiary and McFarlane Partners on behalf of the California Public Employees' Retirement System (Calpers), the biggest U.S. pension fund. LNR Property Corp, a one-time spin off of Lennar, was taken private by Cerberus Capital Management [CBS.UL] and others in early 2005.

LandSource's primary investment is The Newhall Land and Farming Company, which owns 15,000 acres of land north of Los Angeles.

As of January 31, 2007, LandSource had assets with a book value of approximately $1.3 billion and its total assets had been appraised at a value of about $2.6 billion, according to Lennar.

Lennar spokesman Marshall Ames said the home builder would not be liable for LandSource's debt.

A Calpers spokesman declined to comment, while Weyerhaeuser and LNR spokesmen did not return calls for comment.

(Reporting by Emily Chasan, Editing by Toni Reinhold)