New Chapter 11 Bankruptcy - Woodbridge Group of Companies LLC

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Woodbridge Group of Companies LLC

  • 12/4/17 Recap: Real estate finance and development company focused on buying, improving, and selling high-end luxury homes has filed for bankruptcy. It is a "group of companies" because there are literally scores of individual debtor properties that are set up in special purpose vehicles (Propcos) wholly-owned by other related special purpose vehicles (Holdcos). It's like Inception: an SPV within an SPV. 140 Propcos are debtors and 127 Holdcos are debtors. As you can imagine, there are a ton of intercompany transfers here. The company has been the subject of an SEC investigation since September 2016 on the basis of "potential securities law violations, including the alleged offer and sale of unregistered securities, the sale of securities by unregistered brokers, and the commission of fraud in connection with the offer, purchase and sale of securities." Indeed, the company allegedly raised over $200mm from retail investors. But, wait: there's more. The company has also received information requests from state securities regulators in "approximately" 25 states. PETITION NOTE: what do they mean by "approximately"? There are a finite number of states. Have the requests become SO VOLUMINOUS that they company has lost track of how many there've been? The company has secured a $100mm DIP credit facility from Hankey Capital LLC and attempts to have a plan of reorganization confirmed by the end of 2018. 
  • Jurisdiction: D. of Delaware (Judge Carey)
  • Capital Structure: $750mm seller financing.    
  • Company Professionals:
    • Current Legal: Klee Tuchin Bogdanoff & Stern LLP 
    • Previous Legal: Gibson Dunn & Crutcher LLP (Samuel Newman, Oscar Garza, Daniel Denny, J. Eric Wise, Matthew Kelsey, Matthew Porcelli) & (local) Young Conaway Stargatt & Taylor LLP (Sean Beach, Edmon Morton, Ian Bambrick, Allison Mielke)
    • Current Restructuring Advisor/CRO: Development Specialists Inc. (Bradley Sharp) 
    • Previous Restructuring Advisor: SierraConstellation Partners LLC (Larry Perkins, John Farrace, Robert Shenfeld, Reece Fulgham, Miles Staglik, Lissa Weissman)
    • Independent Manager of Affiliate: Beilinson Advisory Group LLC (Marc Beilinson)
    • Claims Agent: Garden City Group (*click on company name above for free docket access)
  • Other Parties in Interest:
    • DIP Lender: Hankey Capital LLC
      • Legal: Buchalter (William Brody, Paul Arrow) & (local) Richards Layton & Finger PA (John Knight, Christopher De Lillo)
    • Former CEO: Robert Shapiro
      • Legal: DLA Piper LLP (US) (Eric Goldberg, Stuart Brown)

Updated 3/24/18 9:45 CT