Newport Beach, Calif.-based William Lyon Homes, a developer of residential communities in California, Arizona and Nevada, has filed voluntary Chapter 11 cases. The cases seek confirmation of a pre-packaged plan of reorganization that the home builder says has the support of both its senior lender and senior noteholders.
Ninety-seven percent of senior noteholders that cast ballots approved the pre-packaged plan, which provides new capital investments of $85 million and eliminates the company's short-term debt maturities. Approximately $180 million in principal amount of debt will be eliminated as part of the recapitalization plan, resulting in a 37% reduction in overall debt, the company says. Annual cash interest expense will be reduced by nearly $25 million, or approximately 45% of current levels.
"Today's action enables us to efficiently restructure our debt and create a capital structure that will provide a foundation for future growth," says CEO General William Lyon.
William Lyon Homes says it expects the reorganization process to be completed in less than 90 days.