Brea-Olinda Venture Files for Chapter 11 Bankruptcy

Brea-Olinda Venture LLC, a Brea real estate partnership that bought a 280-acre parcel known as Olinda Ranch, has filed for bankruptcy protection after failing to win an extension of a $27-million loan.

The company, a joint venture of real estate developers Olinda Properties in Anaheim, CWC Inc. in Anaheim and Carlyle Brea Investors in Brea, was unable to meet its loan obligations to its lender, Bank One, Brea-Olinda spokesman Jason Grange said.

Bank One, Grange said, had begun foreclosure proceedings against the company after declaring the loan due in mid-1999. That led the partnership to file a Chapter 11 petition to reorganize its debts under federal bankruptcy laws.

Brea-Olinda ran into financial difficulties because of unanticipated delays in obtaining state and federal approvals to finish grading the land before it could be sold, Grange said.

He said the partnership has tentative agreements to sell the property to home builders and expects to raise $5 million in additional financing within the next few weeks.

“The value of the project greatly exceeds our liabilities in excess of 2-to-1,” Grange said.

Olinda Ranch, at the northeast corner of Carbon Canyon Road and Valencia Avenue, is zoned for 639 single-family homes. Should the partnership emerge from bankruptcy soon, construction would begin by late spring or early summer, Grange said.

Brea-Olinda, formed in 1996, plans to submit a reorganization plan within the next few weeks, he said. Its Jan. 28 filing in U.S. Bankruptcy Court in Santa Ana listed assets of $50 million to $100 million and debts of $10 million to $50 million.