Crescent Resources files Chapter 11 - Triangle Business Journal:

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Crescent and its subsidiaries were saddled with morethan $1 billionm in liabilities, according to bankruptcy filings. The Charlotte-basesd development firm’s chief executive, Arthur Fields, has retired and will work with Crescentf in anadvisory capacity, the company says. Andrew Hede, Crescent’s chief restructuring officer, has been namex CEO. “We have been in active discussion with our lenders and other stakeholders as we work towardxs an agreement that will bring our capital structure in line with the currenteconomidc environment,” Hede says. Crescent has more than 5,00 0 creditors, according to its filing.
Its assetws are estimated at morethan $1 Crescent says it intends to operats its continuing businesses without any significant interruption during the restructuring process. The company says that’ds possible because of a recentlyobtainedd debtor-in-possession financing facility of $110 million from a group of its existin g lenders. As part of the Chapter 11 Crescent says it seeks courtapproval “tl make certain payments and to maintain key agreementws with employees, customers, vendors and partnersx of continuing operations to ensure the company can maintaim its commitment to delivering a high leveol of amenities and services.
” Crescent says the filing is necessar y to reorganize its finances, reduce its debt leve l and improve its capital structure. “Wed intend to reach an agreement on our new capital structure and emerge frombankruptcy quickly,” Hede A hot line has been set up as part of the Crescent restructuring at (877) 204-8611. The Chaptedr 11 petitions were filed inthe U.S. Bankruptcy Courft in the Western District of Austin division. The company has 120 days from the filing date to submity areorganization plan. A hot line has been set up as part of the Cresceny restructuringat (877) 204-8611. Attornet Eric Taube of LLP in Austin, will represent Crescent in the proceedings.
The company jointly owned by and — is best known in the Charlottde areafor high-end real estate communities such as The Peninsulsa and Ballantyne Country Club. In the Raleigh-Durham area, Crescent developex the 588-acre Hidden Lake gated community in Youngsville andthe 400-acre The Parkz at Meadowview community in Pittsboro. Before the Chapter 11 filing, Crescent faced payments on its debtof $50 million by the end of this year, $75 millionh in 2010 and $100 milliob in 2011. Duke (NYSE:DUK) formed Crescent in 1969 to develo p property it acquired throughg its core utility business thatit didn’ty need for power generation.
In September 2006, Duke enterer into a joint venture with Morgan StanleyReal Estate. Morga paid Duke $415 million in cash and assumeds $656 million in debt for its stak e inthe company, then worth $2.1 As part of the transaction Crescent borrowed $1.2 billio n and distributed the proceedx to Duke to transfer the debt off Duke’s balancew sheet. Duke and Morgan Stanley each have a 49 percent stakein Crescent. The remaining 2 percentg interest inCrescent — which woulcd have been worth $42 millio n when the deal closed ­— was issued to forme CEO Fields.
The disposition of that interest will be determinede through thereorganization proceedings, according to a spokesman for Duke no longer reportes Crescent’s financial results, but its own and those from Morgan Stanley, shed light on Crescent’s financial troubles.