Wednesday, November 05, 2008

$144 million cash “dividend" and Supreme Bean

Suncal update:

McAllister Ranch’s bankruptcy trustee has cast a critical eye on the relationship between Lehman Brothers Inc. and SunCal Co., court filings show —
especially the $144 million cash “dividend” the companies received from a development loan that later defaulted.

The trustee has requested an emergency order to force the Lehman affiliate in charge of $18 million left in a development fund to pay for basic upkeep of McAllister Ranch — southwest Bakersfield’s unfinished 6,000-home development — and two related properties in Riverside County.

The emergency motion filed Tuesday by the Chapter 11 trustee, Alfred H.
Siegel, also said Lehman’s status as first-priority lienholder “may be disputed,” mostly due to emerging details about the $144 million dividend.

A Lehman affiliate got $116 million of the dividend, the motion says.

The document also asserts the original $235 million development loan arranged by Lehman defaulted because the dividend payment made the development affiliate —owned by both Lehman and SunCal — unable to pay its bills.

“One fact is certain,” Siegel’s motion says. “If the $144 million had not been disbursed ... there would have been sufficient cash” to pay the developer’s debts.

Numerous construction companies, some based in Bakersfield, are owed about $46 million by SunCal for work done at McAllister Ranch and the Riverside sites.

Supreme Bean busted:
The new owner of now-defunct Supreme Bean, Bakersfield’s chain of eight drive-through coffee stands, has filed for liquidation bankruptcy.

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