American West Development files bankruptcy, reaches deal with lenders

By Caroline Salls

Pittsburgh, March 2 - American West Development, Inc. filed Chapter 11 bankruptcy Thursday in the U.S. Bankruptcy Court for the District of Nevada.

The company requested court approval to enter into a settlement with California Bank & Trust and other term loan lenders that sets the amount and treatment of their secured claims.

Under the lender agreement:

• The members of the bank group will have up to $49.64 million of allowed secured claims in the Chapter 11 case, which is equal to the net present value of their receivable;

• Under American West's plan of reorganization, each member of the bank group will be issued a promissory note secured by the receivable in a principal amount equal to the product of the claim value and the lender's interest;

• Each member of the bank group will have an allowed unsecured claim in the deficiency amount of $127.87 million;

• The members of the bank group will be deemed to waive their rights against the company to receive any distributions on account of their unsecured claims or any right to interest beyond what they received as adequate protection payments, as long as general unsecured creditors vote as a class to accept the plan; and

• American West Development will be deemed to be the sole owner of the receivable, subject to the bank group's interests under the new secured notes.

DIP financing

In connection with the bankruptcy filing, American West obtained a commitment for $10 million of debtor-in-possession financing from AWH Ventures, Inc.

The facility will mature 15 months from the bankruptcy filing date.

Interest will be 15%.

Debt details

According to court documents, American West has $83.93 million of assets and $187.96 million of debt as of Jan. 31.

The company's largest unsecured creditors include:

• JPMorgan Chase Bank, NA of Phoenix, with a $24.93 million term loan credit agreement claim;

• California Bank & Trust of Phoenix, with a $24.93 million term loan credit agreement claim;

• Bank of America, NA of Irvine, Calif., with a $17.62 million term loan credit agreement claim;

• Wells Fargo NA of Scottsdale, Ariz., with a $17.05 million term loan credit agreement claim and a $14.92 million term loan credit agreement claim;

• Insurance Co. of the West Surety of San Diego, with a $12.16 million surety bond claim;

• US Bank NA of Las Vegas, with an $11.37 million term loan credit agreement claim;

• Key Bank NA of Atlanta, with a $9.95 million term loan credit agreement claim;

• Comerica Bank of Detroit, with a $7.1 million term loan credit agreement claim; and

• The Insco Dico Group of Irvine, Calif., with a $7.55 million surety bond claim.

The company is represented by Fox Rothschild LLP.

American West is a Las Vegas-based homebuilder. Its Chapter 11 case number is 12-12349.

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