Partially entitled master-planned community in Bastrop, TX (a suburb of Austin)
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Force 10 served as Chief Restructuring Officer and developed and executed a strategy to finance the Chapter 11 Plan for XS Ranch, a partially-entitled master-planned community. Our exceptional work was awarded “Financials Deal of the Year (Under $500MM)” by The M&A Advisor.
XS Ranch Fund VI was established in 2006 to acquire, entitle, develop, and sell “path of growth” land in Texas, raising approximately $54 million from 142 investors. By 2015, nine years after its formation, 57 limited partners (LPs) representing 53% of the fund’s capital initiated arbitration against the Fund and its general partner. Their claims included breach of the partnership agreement, breach of fiduciary duty, accounting irregularities, and embezzlement. The petitioning LPs sought remedies, including dissolution of the Fund, removal of the general partner, and conversion of the Fund’s assets.
The arbitration concluded with a settlement awarding the petitioning LPs rescission of their investment and a $29 million monetary award. However, when the award was not paid promptly, three LPs filed an involuntary Chapter 11 petition against the Fund in late 2016.
Force 10 Partners was retained in early 2017 and provided a Chief Restructuring Officer (CRO). Force 10 managed the case’s conversion to a voluntary Chapter 11, overseeing the Fund’s principal asset, XS Ranch—an 8,700-acre residential land development project in suburban Austin, Texas. The team was also tasked with creating a recovery strategy for the remaining 85 LPs, who collectively represented $25 million in invested capital and had chosen not to participate in the arbitration.
– Developed and executed a strategy to finance the Chapter 11 case.
– Re-acquired optioned land to raise cash and strengthen the Fund’s asset base.
– Successfully resolved the claims of the “Rescission LPs” through an adversary proceeding, resulting in no additional recovery for the petitioning LPs.
– Restructured the Fund’s operations to streamline management and reduce costs.
– Confirmed a plan of reorganization that achieved full repayment of creditors, secured exit financing, and enabled the Fund and its remaining LPs to continue developing the property.
Force 10 Partners won Financials Deal of the Year (Under $500MM) award from The M&A Advisor, recognizing the team’s innovative strategies and exceptional execution.
