LandMar Parent Crescent Resources Chapter 11 Bankruptcy Filing

Company Secures $110 Million in New Funding for Operations. Ongoing Operations Will Continue With Minimal Interruption.

Palm Coast, Florida – June 10, 2009(Updated June 20, 2009) Crescent Resources filed for protection from creditors today under Chapter 11 of the U.S. Bankruptcy code. Crescent is the parent of Palm Coast’s second largest real estate developer, LandMar Group LLC. Crescent and affiliates own four golf courses in Palm Coast; Grand Haven, Pines Course, Matanzas, and the Cypress Course. An earlier article chronicled the $1 million in unpaid Flagler County real estate taxes owed by Crescent affiliates as well. LandMar has also filed. The Jacksonville-based residential development company was among 125 affiliates that filed along with its parent company.
The bankruptcy filing does not include the four golf course properties in Flagler County controlled by Crescent affiliates; The Grand Club’s three courses (Pines, Cypress, and Matanzas) or the Grand Haven Golf Club.
Crescent, which began as the real estate development arm of Duke Energy is now a joint venture of Duke Energy and the Morgan Stanley Real Estate Fund.  The company has secured $110 million in interim financing. Chapter 11 provides protection from creditors while the bankrupt company reorganizes its financing under the watchful eye of the bankruptcy court. Unlike a chapter 7 filing which forces the liquidation of all company assets, chapter 11 filings often result in the emergence of viable companies.
The text of Crescent’s news release (issued today) follows:
Crescent Resources today announced that, as part of its ongoing strategy to reduce the company’s debt level and improve its capital structure, Crescent Resources, LLC and certain of its subsidiaries have filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court in the Western District of Texas, Austin Division.
The company intends to operate its continuing businesses without any significant interruption during the restructuring process. In addition, the company has obtained a Debtor-in-Possession financing facility of $110 million from a group of its existing lenders, which will provide sufficient funds to operate its ongoing business activities.
Crescent also announced today that Arthur Fields, chief executive officer of Crescent Resources, has retired from the company and will continue to work with the company in an advisory capacity. Effective immediately, Andrew Hede, Crescent’s chief restructuring officer, will also serve as chief executive officer. Mr. Hede, a managing director with Alvarez & Marsal North America, LLC, has more than 15 years of financial restructuring and business experience. Mr. Hede has worked with numerous companies, including national and regional homebuilders and real estate developers, to develop and
implement financial and operational restructurings and recapitalization strategies.
“We have been in active discussions with our lenders and other stakeholders as we work towards an agreement that will bring our capital structure in line with the current economic environment,” said Andrew Hede. “Those discussions are continuing, and we are pleased with the ongoing support we have received from our lenders. We believe this process will lead to a stronger financial foundation for the company and its stakeholders and that it will better position us to serve our customers and partners over the longer term.
“Despite the unprecedented challenges facing the real estate industry, we believe Crescent’s underlying business model is solid, and our assets remain very attractive. We are encouraged that our lenders have agreed to provide additional funding to support our continued operations and allow us to maintain the high level of service and amenities our customers have come to expect. We intend to reach an agreement on our new capital structure and emerge from bankruptcy quickly,” Hede continued.
“On behalf of the Board and all the employees of Crescent, I would like to thank Art for his tremendous service to Crescent and the entire real estate industry over his long and successful career,” continued Mr. Hede. “He was instrumental in building Crescent into one of the leading real estate development companies in the country, and we are pleased that he will continue to serve as an advisor to the company.”
“Crescent Resources has the best assets and more importantly the most dedicated and passionate employees in the industry. I am confident that this restructuring will position the company better for the future,” said Mr. Fields. “It has been a privilege to work with such a talented team. I can move on secure in the knowledge that Crescent will build on its track record as one of the leaders in the real estate industry.”
As part of its Chapter 11 filing, the company is seeking Court approval to make certain payments and to maintain key agreements with employees, customers, vendors and partners of continuing operations to ensure the company can maintain its commitment to delivering a high level of amenities and services.
About Crescent Resources Crescent Resources, LLC, is a land management and real estate development company with interests in 10 states in the southeastern and southwestern United States. Based in Charlotte, Crescent Resources is a joint venture between Duke Energy and Morgan Stanley Real Estate Fund. Established in 1969, Crescent creates mixed-use developments, award-winning country club communities, single-family neighborhoods, apartment and condominium communities, Class A office space, business and industrial parks and shopping centers. Visit for more information.
Forward Looking Statement
Certain statements included in this announcement contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our current expectations of forecasts of future events, and no assurance can be given that the results described in this announcement will be achieved. You can identify these forward-looking statements by the fact that they do not relate strictly to historic or current facts. They use words such as “anticipate”, “believe”, “estimate”, “expect”, “forecast”, “goal”, “intend”, “objective”, “plan”, “projection”, “seek”, “strategy”, or other words and terms of similar meaning. Any or all of the forward-looking statements included in this announcement and in any other of our reports or public statements may not approximate actual experience, and the expectations derived from them may not be realized, due to known or unknown risks and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. If any one or more of the assumptions underlying our forward-looking statements proves incorrect, then the company’s actual results, performance, or achievements could differ materially from those expressed in or implied by the forwardlooking statements contained in the announcement. Therefore, we caution you not to place undue reliance on these forward-looking statements. We do not undertake any obligation or duty to update forward-looking statements.
6 replies
  1. John Boy
    John Boy says:

    Cresent / Duke / Morgan Stanley

    Why are companies allowed to enter Chapter 11 when the "parent" company is exempt from responsibilities. Makes no sense, that the parents have taken profits over the years and now that times are hard they walk away from their responsibility. This is the reason that bankrupcy laws need to changed. Duke and Morgan Stanley should be putting up the funds to keep Cresent afloat and make good on it’s debt. There is no rational reason for homeowners, stockholders, cities, counties to get haircuts when the idiots at Duke and Morgan Stanley prance around the world with multi million dollar salaries, bonuses, etc.

  2. A Guiglotto
    A Guiglotto says:

    Who’s on First?

    I ditto your comments,John Boy. Why does Duke Energy and Morgan Stanley get to skate on there financial obligations???
    I would like to know what happens to all the Good Faith initiation fees paid by all the golf members??Does anyone know for sure?

  3. Toby
    Toby says:

    Reply to All Hands Working

    The bankruptcy petition was filed by Crescent Resources LLC and affiliates. the Grand Haven golf course and clubhouse, though operated by Hampton Golf, are owned by Crescent Resources, Inc. I’m not sure whether or not the distinction is important. My guess is that it is not.

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