NEW YORK LandSource Communities Development LLC, a large Californian property developer backed by Calpers, the biggest public U.S. pension fund, said on Sunday it had filed for bankruptcy protection.
While not a shock, the news is a blow to companies and funds unable to extricate themselves from troubles in an industry laid low by the credit crisis.
It said however, it "expects not only to survive the current real estate downturn and credit crunch, but to flourish once the market stabilizes."
LandSource said it had received commitments for debtor in possession financing from a group of lenders led by Barclay's Bank (BARC.L), including a $135 million revolving line of credit.
It said that the facility assures that vendors, contractors and consultants will be paid for goods and services provided after the bankruptcy filing date.
"For several months LandSource has attempted to reach agreement with its lenders on an interim plan that would provide the needed time for a complete review of its financial situation," LandSource noted in a statement.
LandSource's primary investment is The Newhall Land and Farming Company, which owns 15,000 acres of land north of Los Angeles.
At the end of April, a Standard & Poor's report said the company would soon seek protection from creditors, citing unnamed lenders. S&P said the company's cash had declined to about $25 million from about $115 million in early February.
LandSource spokeswoman Tamara Taylor said then the company had received an official notice of default on a $1 billion loan, but the default situation "had not accelerated" further.
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).
LNR Property Corp, a one-time spin-off of Lennar, was taken private by Cerberus Capital Management CBS.UL and others in early 2005.
(Reporting by Christopher Kaufman; editing by Rory Channing)