Fairfield Residential files amended plan of reorganization

By Jennifer Lanning Drey

Portland, Ore., June 15 - Fairfield Residential LLC filed an amended plan of reorganization and related disclosure statement based on a new investment agreement with Brookfield Asset Management Inc., according to documents filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

A previous plan with Och-Ziff Real Estate Acquisitions LP as the investor ended in a settlement which received court approval on April 22.

Under the settlement, the March 5 agreement will be terminated and Och-Ziff will immediately withdraw as new money investor, the filing said.

Och-Ziff had agreed to make a $15 million initial investment in Fairfield Residential and a $50 million follow-on investment in the reorganized company, as well as a $50 million co-investment in multi-family acquisitions made by the new company.

Under the amended plan filed Tuesday, treatment of creditors will include:

• Holders of Capmark claims will receive 50% of the closing payment related to a $19.25 million cash payment to be made to FF Properties, Inc. and Fairfield; then 60% of effective date distributions of all distributable cash until $38.2 million has been distributed; then 50% of effective date distributions of distributable cash and 60% of subsequent distributions of distributable cash until the holders of Capmark claims have received $39.75 million; then 55% of subsequent distributions until these claims have been paid in full; and, once all Fairfield/FirstTier subsidiary claims have been paid, 50% of all distributable cash;

• Holders of Fairfield/FirstTier subsidiary general unsecured claims will receive 50% of the closing payment related to a $19.25 million cash payment to be made to FF Properties, Inc. and Fairfield; then 40% of effective date distributions of all distributable cash until $38.2 million has been distributed; then 50% of effective date distributions of distributable cash and 40% of subsequent distributions of distributable cash until the holders of Capmark claims have received $39.75 million; then 45% of subsequent distributions until these claims have been paid in full; and, once all Fairfield/FirstTier subsidiary claims have been paid, 50% of all distributable cash;

• Wachovia facility claims will be satisfied either by the sale of the real estate securing the facility or the return of the collateral;

• Holders of general unsecured claims against Fairview Homes Inc., Fairview Residential LP, Fairview Residential CA LP and Fairview Residential WA LLC will receive a share of cash proceeds from the liquidation of the estate against which the holder has a claim;

• Intercompany claims will be settled and discharged; and

• Existing equity interest holders will receive no distribution.

Fairfield, a San Diego-based multifamily real estate operating company, filed for bankruptcy on Dec. 20. Its Chapter 11 case number is 09-14378.

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