Arizona Bankruptcy Court Denies Confirmation of Saguaro Ranch's Plan of Reorganization for Second Time


On June 1, 2011, Judge Eileen Hollowell entered an opinion and an order denying confirmation of the third amended plan of reorganization proposed by Saguaro Ranch Development Corporation and four affiliated companies. This marks the second time this year that Judge Hollowell has denied confirmation of a plan of reorganization proposed by Saguaro Ranch - she denied confirmation of its second amended plan in February. The companies own over 1,000 acres of land located in the Tortolita Mountains near Tucson, Arizona. They planned to "create a master planned luxury community with maximal open space and minimal impact on the environment" by developing and selling 180 four to five acre lots for custom homes. The community was also planned to include amenities such as restaurants, a spa, tennis courts, and horse stables.

The debtors were not able to reach a settlement to gain the support of their pre-petition secured lenders for the proposed third amended plan. The lenders, Kennedy Funding, Inc. and Anglo-American Financial, LLC, lent the debtors $50 million in 2005 to develop the project. After the court's denial of confirmation of the second amended plan, the court granted the lenders relief from the automatic stay. The debtors appealed that order, but there was no stay of the order pending appeal. A trustee sale was set for later this week.

For more information on the opinion denying confirmation, please read the attached document or visit our blog:

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Randall Reese, Restructuring Concepts LLC | Attorney Advertising

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