HENDERSON, NV-Lake Las Vegas, a 3,592-acre master-planned residential and resort community, has completed the steps necessary to effectuate its plan of reorganization and has successfully emerged from Chapter 11. “This is an extraordinary result,” says Frederick Chin, CEO of Lake Las Vegas, and founder of the Atalon Group LLC.
“The homebuilders, creditors, residents, homeowner groups, vendors, and the City of Henderson worked together to preserve the integrity of the community, resolve a multitude of complex issues that hindered its continuation and establish a platform for the future that enhances the objectives of property owners, homebuilders, lenders and local government,” he adds. “Through hard work and the tireless belief in the long-term viability of Lake Las Vegas, we were able to overcome market and other challenges and accomplish our goals,” he said.
Chin points out that the challenges faced in reorganizing Lake Las Vegas were “immense and were exacerbated by the unprecedented downturn in the real estate and capital markets throughout the US.” He explains that the downturn had a “particularly acute effect on the viability of master planned communities such as Lake Las Vegas that were based on a high level of amenities.”
Despite those challenges, progress was made in re-establishing the position of the community during the bankruptcy cases, including: securing new post-bankruptcy funding of more than $30 million to provide Lake Las Vegas with adequate liquidity to meet its working capital needs; successfully resolving ownership and property boundary issues in Phase II, allowing landowners to effectively develop or market their property; Successfully settling and resolving third-party litigation, disputes with homeowner associations, and more than $25 million in mechanic’s liens; completing critically important repairs to the community’s existing infrastructure, as well as securing additional funds to construct other infrastructure that facilitates future development; and preserving the overall appearance of the community and enhancing its overall marketability by securing water and development rights.
Lake Las Vegas is a 3,592-acre master-planned residential and resort community adjacent to Lake Mead National Recreational Area and 20 miles east of the center of Las Vegas. It includes a 320-acre man-made lake and more than 1,600 completed residential units.
As GlobeSt.com previously reported, back in April 2010, a bankruptcy court had cleared the way for the development to begin soliciting votes on its plan of reorganization for exiting Chapter 11. Lake Las Vegas filed for Chapter 11 protection from creditors July 17, 2008.
A GlobeSt.com report at the time said that the project's developers were unable to find outside financing to pay its creditors and that the Chapter 11 filing would aim to restructure the business plan for the project.
The Chapter 11 filing for Lake at Las Vegas JV LLC listed liabilities of between $500 million and $1 billion, assets of between $100 million and $500 million, and more than 1,000 creditors. LLV Holdco LLC, a subsidiary of Las Vegas-based Atalon Group owned by Chin, assumed ownership and management control of the project in early January 2008 after the former ownership group defaulted on approximately $540 million in loans in 2007. Chin at the time cited a combination of poor liquidity, substantial debt service, extremely challenging real estate market conditions and other legal and financial issues, as the reason for the filing.
“There were many legal and business hurdles to confirming the plan of reorganization in this case,” says Thomas Patterson, of Klee Tuchin, Bogdanoff & Stern LLP, counsel for Lake Las Vegas in the chapter 11 proceedings. “The result is a fair allocation of recoveries among the stakeholders, and a firm foundation for the company’s future.”
Lake Las Vegas will remain under the stewardship of the Atalon Group, which will provide asset management services to the company for the benefit of the new owners. Over the next 18 months, Atalon Group principals Chin and James Coyne will oversee land sales in Phases I and II and refocus the company’s efforts on the long-term development and value maximization of Phase III, according to a prepared statement.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
