Developer reaches settlements over bankruptcy plans

By Steve Green

Monday, Sept. 21, 2009 | 11:41 a.m.

The developer of the Park Highlands planned community in North Las Vegas has reached settlements with two parties that had objected to its plan to exit from bankruptcy.

Court papers filed Friday, in advance of an Oct. 1 hearing on its reorganization plan, show Park Highlands owner November 2005 Land Investors LLC reached settlements with former partner and homebuilder D.R. Horton Inc.; and with the city of North Las Vegas.

Park Highlands earlier reported secured lenders holding a majority of its debt have agreed to concessions in the Chapter 11 reorganization case.

A group of lenders associated with Credit Suisse Alternative Capital Funds remains as an objector to the reorganization plan. These lenders say that under the plan, Park Highlands would remain inadequately funded after emerging from bankruptcy and that it likely will end up in bankruptcy again or be liquidated.

Zoned for as many as 15,750 homes, development of the community was launched in 2007 but was halted after the recession set in. November 2005 Land Investors LLC filed for bankruptcy protection May 8.

Led by Southern Highlands developer Olympia Group, attorneys for November 2005 Land Investors have been in litigation with D.R. Horton over the development's infrastructure development costs.

November 2005 and D.R. Horton said in court papers Friday they have settled their disputes. November 2005 agreed not to oppose D.R. Horton's $31.8 million in claims as a creditor and D.R. Horton agreed not to vote against November 2005's plan to emerge from bankruptcy.

Attorneys for November 2005 also filed an agreement saying Park Highlands' infrastructure and parks and trails agreements with the city of North Las Vegas will not be canceled as part of the reorganization and "will be binding, in their present form, on the debtor and any successors in interest to the debtor."

But given the depressed state of the homebuilding industry in Southern Nevada, attorneys for the city said the city has agreed to discuss amendments to the agreements.

"The debtor is working with the city with respect to possible amendments to the Development Agreement, the Parks & Trails Agreement and other agreements in a manner which will be mutually beneficial and which will take into account the economic and development issues that now exist because of (the) unprecedented economic climate of today," November 2005 said in its filing.