Banning Ranch Development

Thursday kicks off Colorado’s Banning Lewis Ranch bankruptcy sale

We have been following the Banning Lewis Ranch bankruptcy for several months. The 21,500-acre parcel of land is located in Colorado Springs and comprises a large portion of the entire east side of the area. The property was supposed to be the location for a large number of residential homes and smaller commercial businesses.

The proposed expansion of the Pikes Peak area has been stalled due to financial strain for several years, but it appears that the property once again has the hope of being developed. The week-long bankruptcy sale of the property essentially began today, the deadline for bids to be submitted for purchasing the property.

According to a bankruptcy court judge, a closing on the property could occur as soon as June 30, 2011 to end the anticipation over who will control the large expanse of land. An advertisement ran on June 1 in the Wall Street Journal that listed the important facts related to the property including the positive aspects like its development growth possibility, having water, roads and other public improvements in place as well as the possible resources available on the property including mineral, oil and gas.

While the natural reserves were listed as an asset, allegedly only bids with proposed development have been submitted. The court has made it clear that bids would be accepted on the undeveloped 2,400 acres to the north where homes have already been built, not just on the 18,000 acres of completely undeveloped land.

Although the deadline for submission of bids will pass today, the future of the huge parcel of real-estate remains unclear.

Source: The Gazette, “Bids on bankrupt Banning Lewis Ranch due Thursday,” Rich Laden, 22 June 2011

Banning Lewis Ranch debate continues as bankruptcy sale is approved

As part of our blog, we’ve been following the Banning Lewis Ranch bankruptcy story. Banning Lewis Ranch is a large 21,500-acre complex in Colorado Springs. The companies Banning Lewis Ranch Co and Banning Lewis Ranch Development I and II submitted a Chapter 11 bankruptcy petition last October in Delaware where the businesses are incorporated. Late last year, we discussed the efforts by Colorado Spring officials to have the bankruptcy case relocated to Colorado in light of the large role the ranch plays in the community.

Although Colorado Springs officials never succeeded in moving the bankruptcy case to Colorado, the petition has made significant strides through the Delaware Bankruptcy Court. Last April, facing growing pressure from its creditors, Banning Lewis Ranch Co. petitioned the court for permission to sell the Colorado Springs property through a bankruptcy auction. This week a Delaware judge approved the petition, but must still consider an objection filed by the city of Colorado Springs which aims to block the sale.

In 1988, Colorado Springs officially created an annexation agreement with the Banning Lewis Ranch, which explains the city officials’ strong interest in the future of the property. The original agreement states that owners of the ranch have certain responsibilities to the city-such as providing roads and public services on their property-but a sale may alter these provisions.

Colorado Springs officials claim that 180,000 city residents could eventually reside on the Banning Lewis Ranch. The recent ruling permitting the sale of the ranch does not address the city’s concerns, but some observers believe that a Delaware bankruptcy judge will rule on the matter if the new owners attempt to change the original annexation agreement.

Source: The Gazette, “Judge gives green light to Banning Lewis Ranch sale.” Rich Laden, 24 May 2011

Colorado Bankruptcy Court Won’t Get to Hear Banning Lewis Case…For Now

The federal judge who heard Colorado Spring’s request to transfer the Banning Lewis bankruptcy case from Delaware to Colorado refused to allow the venue transfer. The Wednesday, December 8, 2010, hearing lasted a total of 4 ½ hours, during which both parties argued for or against the venue transfer of the highly publicized business bankruptcy case which was filed on October 28, 2010.

While the federal judge denied the Colorado Spring’s request, he left the door open for the possibility of a transfer of venue in the future. In his denial of the motion, the federal judge made it clear that he understood the city’s interest in the case. He acknowledged that because of the annexation agreement and other agreements, the city could be affected in the future. In light of that acknowledgement, the judge said that he would reconsider the motion should the Banning Lewis corporations do anything to disturb the land or any agreement pertinent to the situation.

It was recommended that although the 21,400-acre property, annexed in 1988, makes up a significant portion of the east side of Colorado Springs, the city should not appeal the ruling simply because the judge left an opportunity to honor the request in the future.

The future of the Banning Lewis Ranch is unclear until at least the resolution of the bankruptcy case, but because of the denial, the outcome of the commercial real estate in the case will rest in the hands of the Delaware court system where the owner’s limited liability companies were incorporated.

Source: The Gazette “Judge denies city’s request to move Banning Lewis bankruptcy to Colorado” 12/10/10

CO City Hopes Bankruptcy Judge Will Sign Off on Venue Transfer of Banning Case

In an earlier post titled Developer of 21,400 Acre Colorado Springs Ranch Files for Chapter 11, we announced that the developer of the Banning Lewis Ranch filed for Chapter 11 bankruptcy. The city of Colorado Springs now asks the federal judge presiding over the bankruptcy proceedings to move them back home to Colorado. The case had been filed in a Delaware bankruptcy court where the two California-based limited liability companies who financed the project incorporated their businesses.

Where the case is heard could potentially have a significant impact on the decisions made concerning the bankruptcy depending on the state law that is used. While the companies hope to remain in Delaware courts known for their corporation-friendly laws, the land owned by the developer amounts to a significant portion of the city and could affect the residents and officials of the Colorado city.

The Banning Lewis Ranch was a development plan for a piece of Colorado Springs property that spans across 21,400 acres and comprises a large portion of the Eastern side of Colorado Springs. Plans for the ranch stretched several decades into the future and included estimates of approximately 75,000 residences.

Because the property was annexed by the city in 1988, Colorado law should govern taxes and other matters involved with the land. A Delaware attorney who requested the transfer said that “Colorado Springs has a very important interest in having local controversies decided by Colorado courts.” The developer has opposed the request and argued that although the property is in Colorado, the bankruptcy involves the “sale and recapitalization of Delaware entities,” and that most of their creditors made claims in Delaware courts, under Delaware law.

Source: The Gazette “City wants Banning Lewis Ranch bankruptcy proceedings moved” Rich Laden 12/7/10