Apartment buildings owner Fairfield Residential LLC has filed for Chapter 11 bankruptcy protection with a pre-negotiated agreement intended to facilitate a quick exit.
Fairfield, based in San Diego, owns multifamily apartment buildings around the country.
It said Sunday it entered court protection after failing to refinance debt or sell off investment properties, forcing it into default on certain loans. The reorganization plan that has the support of lenders calls for a core operating company to survive and for Fairfield to sell off certain assets through a liquidating trust to pay back creditors.
The company said it had $958 million in assets and $834.9 million in debt as of the end of September.
Fairfield said it plans to exit court protection early next year.
CEO Christopher Hashioka said the collapse of the real estate and credit markets made it "difficult, if not impossible, for Fairfield to continue without restructuring its financial obligations."
The drop in value of certain Fairfield properties led to defaults and write-offs on certain properties. The cascading effect means Fairfield is now exposed to as much as $1.5 billion in payments and fees, said Chief Restructuring Officer Andrew Hinkelman in a court filing.
Fairfield owns buildings in Boston, Washington, D.C., Atlanta, Dallas, Denver, Las Vegas, Los Angeles, San Francisco, Seattle and other cities.
In 2008, the company said it had $952.9 million in revenue and $107.5 million in net losses.