Update: Oceanwide’s Future Up-In-the-Air… Again
Headlines about the stalled Oceanwide project go from “Mystery Bidder Emerged for Oceanwide” from Bisnow.com/Los-Angeles a week ago to “Stalking Horse Bidder for Oceanwide Falls Through” this week. The ups and downs of Oceanwide continue.
A prominent unnamed local developer was in talks with attorneys representing the building’s ownership in bankruptcy court. The secret bidder was offering to pay approximately $500M to take ownership if no higher bidders came forward in time for the August 15 bid submission deadline for the bankruptcy auction on September 17. This “stalking horse” bidder is important to the bankruptcy procedure to set a “baseline” in the bidding process to discourage low-ball offers. Representatives in the sale process disclosed they were talking to several potential stalking horse “mystery” bidders for the property as of July 16.
Now, we learn the “stalking horse” bidder for Oceanside has fallen through. On July 25, just as anticipation has been building for the fast-approaching solution to the Oceanside Plaza problem, brokers for the transaction announced that the “identified” potential “stalking horse bidder did not meet deadlines” to submit their bid. This leaves a rather large hole in the proceedings as bankruptcy law evidently requires a stalking horse bidder as a preliminary to the bidding process. The stalking horse bidder contractually agrees to pay a minimum amount for the property if no other bidders materialize or perform. We must now hold our breaths a little longer to see if another stalking horse bidder can be contracted.
Lawyers for the owner, China Oceanwide, remain hopeful that the process will proceed as planned. However, the bankruptcy court’s many requirements and the complexity of the bankruptcy process means the final disposition of the property is still very fluid. Final bidding for the project deadline is on August 15, 2024.
By John Nilsson