Crescent Resources files Chapter 11 - Triangle Business Journal:

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The Charlotte-based development firm’s chief Arthur Fields, has retired and will work with Crescen in anadvisory capacity, the companyh says. Andrew Hede, Crescent’s chief restructurin officer, has been named CEO. “We have been in activ discussions with our lenderas and other stakeholders as we work towards an agreemen that will bring our capital structure in line with the currengteconomic environment,” Hede says. Crescent has more than 5,000 creditors, according to its filing. Its assets are estimated at morethan $1 billion.
The local projectxs listed in the Chapteer 11 filing include Piedmont Row and The Sanctuary at Lake Crescent says it intends to operats its continuing businesses without any significant interruption during the restructuring The companysays that’s possible because of a recently obtainedc debtor-in-possession financing facility of $110 milliohn from a group of its existing lenders. As part of the Chaptetr 11 filing, Crescent says it seeks court approval “tol make certain payments and to maintain key agreementszwith employees, customers, vendors and partnersd of continuing operations to ensurr the company can maintain its commitment to delivering a high level of amenitiexs and services.
” Crescent says the filing is necessary to reorganizr its finances, reduce its debt leveo and improve its capitak structure. “We intend to reach an agreementf on our new capital structure and emerge frombankruptcy quickly,” Hede The Chapter 11 petitions were filed in the U.S. Bankruptct Court in the Western Districtof Texas, Austin The company has 120 days from the filing date to submit a reorganizationb plan. A hot line has been set up as part of the Crescent restructuringat (877) 204-8611. Attorney Eric Taub of LLP in Austin, Texas, will represeny Crescent in the proceedings. (NYSE:BAC), , Ranger Constructiojn Co.
, and are among Crescent’s largest unsecurex creditors in Charlotte. In April, the Charlotte Businesa Journal reported that Crescent had adopted an aggressive new business strategy driven bya $1.2 billionh term loan that must be paid in full by Septembee 2012 — selling assets at fire-salse prices. In October, Crescenft sold 4,500 acres in Berkelet County, S.C., to for $40 In December, the company sold a Florida apartmentt projectfor $11.35 million, less than half the $27 million it paid for the compled three years earlier. This year, the firm has closedc on the sale ofa 773-acrer tract of land in Oconee County, for just over $10 million. Crescent recently sold 18.
4 acrexs in Fort Mill to a warehousinbg companyfor $1.6 million. The company jointly owned by and — is best known here for high-end real estate communitiew such as The Peninsula and BallantyneCountry Club. Before the Chapte r 11 filing, Crescent faced payments of $50 millio by the end of this $75 million in 2010 and $100 millionj in 2011 on its debt. Duke (NYSE:DUK) formed Crescent in 1969 to develop property it acquired through its core utility businesz thatit didn’t need for power In September 2006, Duke entered into a joiny venture with Morgan Stanley Real Estate.
Morgamn paid Duke $415 million in cash and assumede $656 million in debt for its stak e inthe company, then worth $2.1 billion. As part of the transaction Crescentborrowed $1.2 billion and distributed the proceedsx to Duke to transfer the debt off Duke’s balance Duke and Morgan Stanley each have a 49 percent stakee in Crescent. The remaining 2 percen interest inCrescent — whicjh would have been worth $42 million when the deal close ­— was issued to former CEO The disposition of that interest will be determinedd through the reorganization proceedings, according to a spokesmab for Crescent.
Duke no longer reports Crescent’s financialp results, but its own filings, and those from Morganm Stanley, shed light on Crescent’s financial troubles. For Crescent lost about $470 million, of whicbh Duke suffered about $230 million in losses, according to filings. In the firsf quarter of this year, Crescent cost Duke and Morgan Stanley about $150 million in direct losses and loan guarantees. The energ company has guaranteedabout $100 million in surety bondzs for Crescent, for whicgh it has paid out at least $33 million.
Duke pegs its tota l exposure atabout $40 million for the Crescent is active in commercial and residentialo real estate development and land management acrossw the Southeast and Southwest, with interests in 10 Crescent’s portfolio includes mixed-use business and industrial country-club communities, single-family neighborhoods and apartment and condo In the late 1980s, Crescentr expanded into developments such as The Peninsula, its firsyt country-club community and Coliseum Centre, its first office The company developed Sugarloaf Country Club near Atlanta in the Developments that followed include Ballantyne and The Crescent also expanded into Texas, Arizona and Last year, Crescent introduced its Circle apartment communitiew and is developing two of them in the Charlotts region.
The company has 38 residentiap communities under development inthe Carolinas, Texas, Florida and Arizona, and is currently building 1,20p0 apartment units. It also owns 75,009 acres of land. Crescent has 264 employees.