Advertisement
YOU ARE HERE: LAT HomeCollections

Los Angeles

Legal Snag Puts Ritter Ranch Sale on Hold

January 10, 2003|Karima A. Haynes | Times Staff Writer

A Texas real estate company's plan to buy sprawling Ritter Ranch on the outskirts of Palmdale has hit a legal snag that could further delay development of the site where a 20,000-resident community was first proposed a decade ago.

The real estate developer, RR Property Holdings, is seeking to buy the 7,400-acre parcel owned by Ritter Ranch Development, whose 1998 bankruptcy filing halted plans to build 7,000 homes in the Leona Valley area.

The property was expected to be sold this month at a land auction in U.S. Bankruptcy Court. However, several parties filed objections to the purchase and sales rules set by a court-appointed trustee for the bankruptcy proceeding.

On Thursday, Judge Geraldine Mund agreed to continue the case until Feb. 19, when she is expected to rule on the objections raised by Ritter Ranch Development, the city of Palmdale, KB Home Corp., RELCO and other investors.

The most serious objections were raised by RELCO, a Nevada real estate developer. It complained that trustee Robbin L. Itkin rejected its higher bid of $7.6 million plus 5% of net profits from development in favor of RR Property Holding's bid of $6 million.

In court documents, Itkin said she selected RR Property Holdings because the company put down a $600,000 deposit, agreed to place the full purchase price in an escrow account two days before a sale hearing, and did not seek any contingencies.

In contrast, RELCO submitted a purchase and sale agreement that the company could terminate up to five days before the sale hearing at its own discretion, and it offered a $100,000 deposit. Itkin said the firm's offer of 5% net profits from development was "extremely speculative and cannot be relied upon for distributions to creditors" to settle the owner's debts.

In another objection, RELCO and other investors have asked the court to investigate whether the auction process has been tainted because Itkin's stepson, William B. Freeman, has served as legal counsel for RR Property Holdings throughout the bankruptcy proceedings.

Itkin said she disclosed the relationship immediately after she was appointed to the case, adding that "no relationship in this case has had any impact or bearing on the trustee's choice of [RR Property Holdings]."

Thursday's hearing was the latest legal wrangling in a decadelong court battle over ownership of the property.

Ritter Ranch originally covered more than 11,000 acres, but only 7,400 acres remain. When an early building phase was approved, about 4,200 acres were permanently deeded for parkland, even though construction never took place.

The 11,000-acre parcel was put on the market for $27 million in 1988, when real estate was booming, and has changed hands several times. Its slide into foreclosure and bankruptcy was attributed to the real estate market crash in the early 1990s.

Advertisement
Los Angeles Times Articles
|
|
|