Plaintiff Whittaker Corporation Alleges “Subordination Claims” of $35 Million in Santa Clarita Bankruptcy
March 7, 2022, District of Arizona – Plaintiff Whittaker Corporation, a secured creditor in the bankruptcy case of Santa Clarita, LLC (the “Debtor”), initiates a complaint against Blue Ox Holdings and Debtor’s Trustee, Michael W. Carmel, and thirty (30) unnamed defendants, alleging “subordination claims” involving “lien” and loan amount totaling $35,000,000.
As alleged in the complaint, the Debtor was “formed to acquire approximately 972 acres of undeveloped land located at Santa Clarita” and Whittaker and the Debtor executed an agreement for the purchase/sale of a property, and as a condition precedent for Debtor to purchase the property, the Debtor asked Whittaker to enter a “loan agreement” with Porta Bella Lender, LLC (“PBL”) in the principal amount of $35,000,000 (the “PBL Loan”). Next, the complaint contends that Whittaker and Debtor “executed a subordination agreement” later with the understanding that the PBL Loan would be “used to remediate the property”, and Whittaker agreed to “subordinate” the deed of trust to the $35 Million PBL deed of trust. Subsequently, Blue Ox purchased the PBL note, loan agreement, and deed of trust and filed proofs of claims in the bankruptcy case.
The complaint asserts that under the subordination agreement Whittaker allegedly “did not contractually subordinate” to the total amount of the debt stated by Blue Ox as senior debt. Plaintiff contends that Blue Ox allegedly “improperly and unilaterally modified the PBL loan” and “never informed” Whittaker of the modifications to the PBL Loan agreement or the Whittaker/PBL subordination agreement. Accordingly, the complaint argues that Plaintiff’s interest in the property through the Whittaker deed of trust is superior to that of Blue Ox, and Plaintiff is entitled to a declaration that its interest is superior and not subject to the claim by Blue Ox.
In re Santa Clarita, LLC, Case No. 2:20-bk-12402-MCW