Crawford Hills Associates Files Chapter 11 Petition : Bankruptcy: The partnership moves to avert foreclosure and a public auction of the 291 acres of undeveloped property in the hills of Orange.
SANTA ANA — A partnership that owns 291 acres of undeveloped property in the hills of Orange has filed for federal bankruptcy protection from creditors.
Crawford Hills Associates filed the Chapter 11 petition in U.S. Bankruptcy Court in Santa Ana on Dec. 19--the same day that its major lender, Security Pacific National Bank, had scheduled a public auction of the land in a notice of foreclosure.
“(Crawford Hills Associates) felt there was a better way (than foreclosure) to solve the problem,†said Dick Oliver, senior vice president of Dividend Development Corp. The partnership is made up of DDC, a Santa Clara-based home builder, and a group of Southern California investors.
The partnership purchased the land, located off Crawford Canyon Road, in 1989 for about $60 million. Crawford Hills Associates had hoped to build 400 residential units on the scenic property, including 17 custom homes, 50 duplexes, 33 single-family homes, 68 condominiums and 232 townhouses.
“But then the market fell apart and the need for houses evaporated,†Oliver said. “We were hoping to let (the property) sit a while and wait for the market to catch up. But . . . we just didn’t have the cash flow to do that any longer.â€
He said the partnership “hopes to work things out†with its lender through a bankruptcy reorganization.
Crawford Hills’ bankruptcy filing lists $42 million in assets and $38.3 million in liabilities. “It (the partnership) has substantial equity in the (Orange) property,†Oliver said. “That would have been completely wiped out by a foreclosure.â€
In its foreclosure filing, Security Pacific listed an estimated opening bid for the property at nearly $29.5 million. The opening bid usually represents money still due on the loan, penalties and trustees’ fees.
A bank spokeswoman declined comment.
Founded in 1971, Dividend Development is a medium-size builder that constructs about 300 homes a year, mostly in Northern California, Oliver said. He added that the company’s projects seldom ran into financial problems until the advent of the recession and the ensuing credit crunch that has crippled the building industry.
“Lenders today are unwilling or unable to extend loans,†Oliver said. “These are hard times for all of us.â€
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