Force 10 developed and executed a strategy to finance the chapter 11 case, re-acquire land that had been optioned to raise cash, resolved the claims of the ‘recission LPs’ via an adversary proceeding which resulted in them receiving $0, restructured Fund operations, and confirmed a plan of reorganization that repaid creditors in full and provided both exit financing and the opportunity for the Fund (and its remaining LPs) to move forward with development of the property. Force 10’s work on XS Ranch was awarded “Financials Deal of the Year (Under $500MM)” by The M&A Advisor.
XS Ranch Fund VI was formed in 2006 to acquire, entitle, develop and sell “path of growth” land in Texas. The Fund raised approximately $54 million from 142 investors. In 2015, nine years after their initial investment, 57 LPs representing 53% of the capital brought an arbitration action against the Fund and its general partner, alleging a litany of claims for breach of the partnership agreement, breach of fiduciary duty, accounting, dissolution, conversion, embezzlement, and removal of the general partner, among others. The arbitration was ultimately settled, with the petitioning LPs obtaining recission of their investment plus a monetary award for return of their capital ($29 million). When the award was not paid timely, three of the LPs filed an involuntary chapter 11 petition against the Fund in late 2016. Force 10 was retained in early 2017 to provide Michael VanderLey as the Chief Restructuring officer in connection with the conversion of the case to a voluntary chapter 11. In addition to managing the Fund’s principal asset, XS Ranch – an approximately 8,700-acre residential land development project in suburban Austin, Texas – the CRO was tasked with creating a recovery strategy for the remaining 85 LPs ($25 million of invested capital) who had not joined the arbitration and stayed with the Fund. Force 10 managed an extraordinary result in the XS Ranch bankruptcy. Force 10 developed and executed a strategy to finance the chapter 11 case, re-acquire land that had been optioned to raise cash, resolved the claims of the ‘recission LPs’ via an adversary proceeding which resulted in them receiving $0, restructured Fund operations, and confirmed a plan of reorganization that repaid creditors in full and provided both exit financing and the opportunity for the Fund (and its remaining LPs) to move forward with development of the property. Force 10’s work on XS Ranch was awarded “Financials Deal of the Year (Under $500MM)” by The M&A Advisor.
