Deal Saves Equestrian Center From Foreclosure

The debt-ridden Los Angeles Equestrian Center, which has suffered losses of up to $20 million during the last six years, has been granted an 11th-hour reprieve from foreclosure by Gibraltar Savings of Beverly Hills.

A repayment plan was worked out with Gibraltar, which had planned to put the center up for sale next week.

The center, which sought protection from its creditors under Chapter 11 of the U. S. Bankruptcy Code in 1984, filed the new plan of reorganization this week with Bankruptcy Court in Los Angeles. The plan will keep the center operating with new financing as it severs its ties with Gibraltar, said Richard Lee Wynn, an attorney who represents the center.

“This is the culmination of several years of effort to achieve a workable financing of the center,” Wynn said.

The 70-acre center is on property owned by the City of Los Angeles and sits on the border between Burbank and Los Angeles. The entrance of the center is in Burbank. It is leased by Los Angeles to Burbank-based Equestrian Centers of America.

Capital Infusion

Wynn said the center will receive an “infusion of capital” from Trafalgar Capital Corp. and Trafalgar Holdings Ltd., a Los Angeles-based financing firm. The center will receive a loan of $12.3 million, $9 million of which will pay off the center’s debt to Gibraltar, Wynn said.

“Although Gibraltar contends that the center owes them $18 million, they will accept the $9 million, and that will clear the slate,” Wynn said. He said much of the center’s debt to Gibraltar is interest money and that the true amount of the debt is still undetermined.

“We believe that our payment is very fair,” he said. If the center makes the payment to Gibraltar by April 25, the association between Gibraltar and the center will end, Wynn said.

The agreement came after about a year of negotiations with Gibraltar, Wynn said.

Much of the rest of the loan from Trafalgar Holdings will pay off other creditors, Wynn said. The City of Los Angeles will receive $300,000 in rent, he said. Other money will be used to buy furniture, fixtures and equipment for the center’s restaurant and banquet room, he said.

“What’s important to note is that the operation of the center will go forward,” Wynn said. “The polo matches will continue, and there will be horse shows. There will be no disruption of services at the center.” In fact, he said, services should be enhanced.

The equestrian center, 480 Riverside Drive, will reorganize its structure and operation, said J. Albert Garcia, the center’s president. Without the cloud of foreclosure hanging over it, Garcia said, the center should start to turn a profit by the middle of the year.

“Nobody is a miracle worker,” Garcia said. “Things don’t turn around overnight. But we’re on an upward trend.”

Plans for a health club to be built at the center have bogged down, officials said. A contractor could not be found to build the club.

Also, construction of a proposed access road to the center off the Ventura Freeway has been put on hold. The road would have made the center more accessible and put its main entrance in Los Angeles instead of Burbank.

The reorganization plan must be approved by a bankruptcy judge and the City of Los Angeles, Lynn said. He said he hopes that the plan will be approved by the end of March.