Rockport Development, Inc. announced that on May 7, 2020 it filed a voluntary petition for Chapter 11 relief in the United States Bankruptcy Court for the Central District of California, Santa Ana Division to facilitate its reorganization and conduct an orderly sale process for its assets.
Rockport is a California corporation that acquires, entitles, develops, constructs and/or “flips” high end single- and multi-family residential real estate located in Southern California. As of the petition date, Rockport, along with its affiliates, owned 27 projects ranging from vacant land, partially constructed single-family and condominium/townhome product, to finished projects ready for leasing and/or sale.
“In 2019, certain lenders and investors to the Company and its affiliates began alleging financial misconduct by the Company’s former CEO, leading to the filing of various lawsuits. At around the same time, Rockport and many of its affiliates began missing debt service payments to their secured lenders, resulting in several of those lenders initiating collections actions. In light of the allegations and financial issues facing the Company, the CEO agreed to resign and appoint an independent board of directors and Chief Restructuring Officer to oversee Rockport’s affairs,” said Michael VanderLey, Rockport’s Chief Restructuring Officer, and Partner with Force 10 Partners.
“The purpose of the Chapter 11 case is to maximize value and to have a completely transparent and orderly disposition process for the Debtor’s assets, including the sale of the various real estate projects free and clear of liens and interests pursuant to 11 U.S.C. § 363, subject to overbid, and Bankruptcy Court approval,” added VanderLey.
The Company has received interim Bankruptcy Court approval for a debtor-in-possession financing package. A final hearing on the debtor-in-possession financing is scheduled for July 1, 2020. Brokers are being interviewed to market the properties and the Company has begun the process of entertaining expressions of interests and offers to acquire the real estate on an individual property, bespoke combination, or total portfolio basis.
Matthew Grimshaw and David Wood of Marshack Hays LLP are serving as the Company’s legal counsel and Force 10 Partners is providing Mr. VanderLey as the Chief Restructuring Officer. Grobstein Teeple LLP has been retained as the Company’s financial advisor and accountant.
Force Ten Partners, LLC (dba Force 10 Partners), is based in Newport Beach, California. The advisory firm has deep domain knowledge in financial and operational corporate restructuring, valuation, forensic accounting, complex litigation support, and computations involved in court proceedings and dispute resolution. Force 10 serves middle-market companies as well as their creditors, stakeholders, and professionals, in roles including financial advisor, interim manager, fiduciary services, expert witness, financier, and M&A advisor.