Thursday, August 28, 2008

Diablo Grande gets another continuance

7:55 p.m. update: Sorry for the delay. Here's my article on the Diablo Grande hearing for Saturday's paper.

Just got back from the teleconference in Modesto. Don't have much time, as I need to get a full story written for Saturday's paper, but here's a quick rundown from today's nearly two-hour hearing:

Diablo Grande has a buyer, World International LLC — a resort developer with projects in places like Cancun and Mexico City — that is willing to pay $20 million plus the $1.5 million cure amount to assume contracts with the Western Hills Water District and others. They still need a few days to finalize an asset purchase agreement and a couple of weeks for World International to complete an engineering study of the project, but both sides expressed confidence that all matters could be worked out.

Because the sale price is below the $26 million the proposed settlement was contingent upon, more money is needed. Some of that money is going to come from "insiders" — companies like Oak Flat Golf and Isom Ranch Winery and Vineyards that have helped to fund and operate Diablo Grande and who owe Diablo Grande a total of more than $11 million. The claims against these insiders are being released in the settlement, a fact judge Robert S. Bardwil (not Baldwil, as I called him in a previous post) expressed great concern over.

Representatives from every side of this thing — including lawyers for Diablo Grande, developer Donald Panoz (representing the "insiders"), the Bank of Scotland, the committee of unsecured creditors and the proposed buyer — laid out their reasons for accepting the settlement and the releases given to these insiders and urged Bardwil to consider the possible damage that could be caused if the sale and settlement are not approved.

Bardwil granted a continuance of both the sale and settlement motions to Sept. 9 at 10 a.m., again at the U.S. Bankruptcy Court in Sacramento. And it sounded as though the pleadings from all sides might have convinced him that both can likely be approved.

That doesn't mean the sale will close, but it's something.

Diablo Grande is very close to running out of money, by the way. It will receive an additional $200,000 from the Bank of Scotland once an asset purchase agreement is signed in order to continue operating while the sale is closed, but that won't cover expenses for the time during which World International will be conducting its engineering study. Diablo Grande attorney Michael Ahrens said he's working with the insiders to obtain the roughly $900,000 needed to continue operating through the end of September.

This will probably be the last you hear from me until the story for Saturday's paper is posted on the Web site (which should be some time today).

Diablo Grande hearing update

Diablo Grande says it has an offer of $20 million but needs more time to close sale. More to come.

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Diablo Grande looks to move forward

8 a.m. update: As I said in an earlier post, I'm going to try and send an update to this blog via text message from my cell phone as news breaks during the hearing. I'm not making any promises, but we'll give it a shot.

Unfortunately a car accident (my own, not one I had to cover) derailed my day yesterday, so I was unable to check with Diablo Grande attorney Michael Ahrens about his plans for today's bankruptcy hearing. But I just checked for new court documents online — last time, the motion for continuance was filed the day before the hearing — and there wasn't anything of that sort.

There is, though, a supplemental pleading that was filed Monday responding to judge Robert S. Baldwil's concerns about the sale and the settlement. Baldwil said at last Tuesday's hearing that it would be in Diablo Grande's best interest if its officials did not try to convince him that everything should be approved as-is, but rather they should offer more disclosures about the settlement itself.

It doesn't appear they've taken his advice.

If the memorandum filed Monday is any indication, Ahrens intends to argue that the sale and settlement should be approved as-is, stating that the precedent Baldwil cited is not as valid as the precedent Diablo Grande is citing. That sounds dangerous to me. We'll see how Baldwil responds this morning.

On the matter of the sale itself — without which all of this settlement talk becomes moot — it appears that as of Monday, Diablo Grande was "in the final stages of discussions with certain bidders" and that "those discussions may result in further adjustments to the provisions of the" settlement. That also could be problematic. Was there enough time for the settlement to be adjusted and for all of those involved in the settlement to give their OK? If Baldwil was resistent to the first settlement, will he be any more likely to approve a lesser one?

My mostly uneducated guess — based on nothing but pure speculation — is that Diablo Grande will come forth with a buyer, and either a) the sale won't be approved by the judge, or b) the revised settlement will be contested by one or more creditors. Regardless, it seems unlikely impossible that this will all be over today.

There should be plenty more drama than there was last week, though.

Wednesday, August 27, 2008

Campaigning continues to evolve

In case you haven't noticed, there's quite a discussion going on in the comments section of John Saiz's Aug. 20 article introducing Patterson's candidates for mayor and City Council. Not much of a surprise there, given the heat that's always generated by issues like West Park and overall growth.

What is somewhat surprising, though, is that one of those candidates has jumped into the conversation. City Council hopeful and political newcomer Jeff Realini — one of four battling for two seats — began by offering his opinions on certain aspects of the discussion but today defended himself when other commenters went more or less on the attack.

Of course, we're assuming it's really Realini and not some 19-year-old in his mother's basement posing as Realini. Always a good idea to take supposed Internet identities with a healthy dose of skepticism. But this one passes the smell test, for me at least.

The conversation has been mostly civil and really rather interesting. I won't say I necessarily agree or disagree with any of Realini's points, but you have to give the guy credit for one thing: Any candidate willing to take on anonymous Internet posters on their own playing field gets bonus points for courage.

Score one for accessibility.

Tuesday, August 26, 2008

Welcome to PI Connect

Well, I was all set to write a nice, long introductory post here, but I'm nearing the end of one very long day. Between preparing Wednesday's paper, sifting through video of Monday's General Plan Advisory Committee Meeting (see the final product here), packaging the first Street Beat of our new digital era, editing a highlights package from Tuesday's Patterson High football practice and trying to get started on stories for Saturday's paper, I simply ran out of time and gas.

Then again, after plowing through my column about all the changes we're unveiling on Wednesday, I'm sure you've just about heard enough from me as it is.

So I'll keep this short. What you're looking at is the PI Connect blog, a place for discussion of Patterson's most contentious issues as well as breaking news and who knows what else. Reporter John Saiz, who covers just about every meeting in town and does so with the greatest of ease, will bring his knowledge and insight to this blog. I will merely attempt to look like I'm keeping up.

You also have a role in all this. You'd be surprised how much we get out of reading the comments on some of our articles, and I'm not just referring to the entertainment value of them. A lot of you obviously care very deeply about this town and where it's headed, and I hope many of you will find your way to this blog and use it as another outlet for your thoughts and emotions. We're here to serve you, and the more you tell us what you're interested and what you want to see, the better we can accomplish that goal.

If I can offer one piece of advice, it would be to come back soon (and often). John tells me he's already planning to elaborate on Monday's GPAC meeting in a blog post on Wednesday. And I'm going to get really ambitious on Thursday and try to post to this blog via a text message from my cell phone — as far as I can tell, that's the only way I'll be able to give you all an update on Diablo Grande's much-anticipated bankruptcy hearing before I leave the courtroom. The hearing starts at 10 a.m., and I'm hoping to have at least a one-liner announcing a sale another continuance as soon as it's been approved.

That's all I've got for tonight. See you soon.