Daily News: December 5, 2017

Hankey Capital Provides $100MM DIP for Woodbridge Group

The Woodbridge Group of Companies filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Woodbridge will continue to operate through the Chapter 11 proceedings.

In support of this restructuring, the company obtained a commitment for up to $100 million in debtor-in-possession financing from Hankey Capital, providing sufficient liquidity to maintain its operations and continue property development in the ordinary course of business during the Chapter 11 process.

The Woodbridge Group is a developer of high-end real estate. As the size and scope of the business has grown, increased operating and development costs have been exacerbated by the unforeseen costs associated with ongoing litigation and regulatory compliance. This combination of rising costs and regulatory pressure led to a loss of liquidity, resulting in Woodbridge’s inability to make its regularly scheduled one-year notes payment due December 1, 2017. In consideration of all of these factors, the company determined that a recapitalization of its debt provides the most efficient and effective path to restructure debt and maximize recovery for its creditors and investors.

In September 2016, the company came under investigation by the SEC in connection with alleged securities law violations. The company will continue to cooperate fully and work with the SEC and state regulators toward resolution of any investigations.

Woodbridge also restructured its management team. President, Manager and CEO Robert Shapiro resigned effective December 1, 2017 and is engaged in a consulting capacity. Lawrence Perkins of SierraConstellation Partners was appointed chief restructuring officer and Marc Beilinson of Beilinson Advisory Group was appointed as independent manager. Perkins and Beilinson will lead, manage and oversee the company’s businesses.

“Woodbridge has already taken a number of steps in the right direction to rebuild a solid financial platform,” Perkins said. “Using the Chapter 11 process, the company will be able to continue its normal daily operations and expedite the process of recapitalizing its debt. We are focused on developing a plan of reorganization to emerge from Chapter 11 as a strong and viable company.”