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| Diablo Grande back in court |
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| Written by James Leonard | Patterson Irrigator | |
| Friday, 05 September 2008 | |
 GIVING IT ANOTHER GO: The embattled Diablo Grande development will be the subject of yet another bankruptcy hearing Tuesday. Then again, not much seems to go according to plan in the troubled golf resort and housing development’s bankruptcy case. There seemingly has been a new twist at every turn. It appears Diablo Grande has a real buyer this time — even though the sale price will be far less than what it was originally shooting for — and it likely has a settlement with its creditors that will be approved by the U.S. Bankruptcy Court. At a 10 a.m. Tuesday hearing at the bankruptcy court in Sacramento, Diablo Grande is expected to present a signed asset purchase agreement with vacation resort developer World International LLC and a revised settlement with its creditors. Diablo Grande officials hope both will be approved, though the sale apparently will be contingent upon an engineering study that World International will still need to undertake. Information regarding World International, meanwhile, has been hard to come by. A brief public records search provided proof the company exists, but little else. World International’s representative at the last hearing, attorney Michael Breslauer, said the company’s owners like to keep a low profile. He wouldn’t divulge any information about the company or its plans with Diablo Grande. World International doesn’t appear to have any sort of Web presence, and it has no connection to World International Vacation Club, according to that company’s president and Breslauer. Regardless of its desired anonymity, World International could soon be the proud new owner of a very troubled project — and at quite a discount. Diablo Grande has been listed for as much as $150 million, but its attorney, Michael Ahrens, said at an Aug. 28 hearing that World International’s winning bid in the sealed auction was just $20 million. That’s not including the $1.5 million World International will pay to resolve debts with the Western Hills Water District and assume that and other contracts, but even with that, it falls well short of the $26 million number that the proposed settlement required. The difference will apparently be made up by “insiders,” companies that have helped fund and operate Diablo Grande and who owe the project a total of more than $11 million. Those companies, whose debts are being released, will also have to come up with about $900,000 to allow Diablo Grande to keep operating until the engineering study is done and the sale goes through. With so many moving parts, it’s still possible that one or more aspects of the deal could fall through or Diablo Grande could request yet another continuance. The last two hearings were both postponed so the company could continue negotiations with possible buyers. To contact James Leonard at the Irrigator, call 892-6187.
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