Crescent Resources in OK Shape. No Push to Sell Assets at Fire Sale Prices
Restructuring expert who took over as CEO after Crescent filed Chapter 11 Bankruptcy says he expects restructuring plan to be filed within 60 days.
Palm Coast, FL – October 26, 2009 – Crescent Resources, the parent of LandMar Group, one of Palm Coast and Flagler County’s largest real estate developers, has put out positive news of progress toward emerging from bankruptcy.
From: Oct 23, 2009 (The Charlotte Observer – McClatchy-Tribune Information Services via COMTEX)
Restructuring specialist Andrew Hede took over as chief executive of Crescent Resources, the Charlotte-based real estate development company, when the company filed for Chapter 11 bankruptcy protection in June.
The Australia native is a managing director at Alvarez & Marsal, the New York management consulting firm called in as Crescent struggled with heavy debt and plunging sales.
Crescent, created by Duke Energy in 1969 to manage 270,000 acres of its Carolinas land, is jointly owned by Duke and Morgan Stanley. In court papers filed last month, Crescent reported $17 million in year-to-date revenues compared with $108 million in 2008.
Hede, 37, talked with the Observer about the company’s restructuring and its prospects. His comments are edited for clarity and brevity:
Q. How is the bankruptcy proceeding?
When we filed, we had a goal to get the company out of bankruptcy fairly quickly, but there were certain things we needed to do along the way — restructuring the balance sheet and making some changes to our operations and our asset base.
So we’ve spent a considerable amount of time working on a revised business plan, which we have delivered to both our secured lenders and our (unsecured) creditors’ committee. Now the emphasis is on having discussions about what a plan of reorganization will look like.
Q. How long will the Chapter11 process take?
Our goal would be to have a plan on file inside of the next 60 days. There’s not a lot left that we need to do, so it’s more negotiating a plan. Once we have a plan, we would hope we would see the company emerging in the first quarter.
We are extremely happy with where things are right now. There’s been chatter in the real estate marketplace that Crescent is going to liquidate, that Crescent is running out of cash. From our perspective, we probably have a much better liquidity position than many of our competitors.
Toby’s Commentary: The news from Crescent Resources should, to some extent, abate the concerns of residents of Crescent developed communities (mostly in the southeast) as well as club members and those who live adjacent to one of Crescent’s golf courses.
Crescent has two active developments in Flagler County (Grand Haven and Grand Landing) and hundreds of acres of entitled land (approved for development). The news also puts a damper on any remaining rumors of a Grand Haven Golf Club sale.
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Gratitude
Many thanks for your brilliantly written and timely updates. You hear it first from Toby. Art Dycke