Group Asks Time for Study : Real estate: Butler-Popejoy wants to see if major funding could boost value of bankrupt Hill Williams’ assets.

A real estate development group asked a U.S. Bankruptcy Court judge Monday for additional time to complete a preliminary study that could lead to a “substantial” investment in the now-bankrupt Hill Williams Development Corp.

During a conference Monday in U.S. Bankruptcy Court in Santa Ana, the group that includes thrift industry veteran William J. Popejoy sought permission to complete an in-depth study of Hill Williams’ properties and its financial records.

Irvine-based Butler-Popejoy Group would use the additional time to determine if a “significant” capital infusion could boost the value of Hill Williams Development’s assets, Popejoy said. Such funding could increase the eventual return to investors in now-bankrupt Hill Williams Development, Popejoy said.

Before declaring bankruptcy early this year, Hill Williams Development in Anaheim Hills raised $90 million from about 5,000 investors. The company had promised investors an annual 15% return on their money, but it entered Chapter 7 bankruptcy proceedings and state regulators accused the firm of running a Ponzi scheme, where investors’ money is used to pay returns to earlier investors.

Hill Williams Development’s assets are to be sold off in the coming months through the ongoing Chapter 7 bankruptcy proceeding. But Popejoy’s group believes that it could increase the value of those assets by keeping them together.

Popejoy’s group would invest in the now-failed company’s assets--mostly vacant lots in Orange and Riverside counties--thereby creating “a partnership” with the failed company’s investors, Popejoy said.

“We’re hoping that the investors who have been victimized . . . be given a chance to recoup some of their investment . . . rather than see the assets sold off in a piecemeal, fire-sale approach,” Popejoy said.

Titan Value Equities, a Newport Beach company that steered many investors to Hill Williams Development, also is reportedly considering a separate recapitalization plan.

Ronald Rus, attorney for the trustee for several limited partnerships that invested in Hill Williams Development, expressed hope that an outside investor is forthcoming. “We’ve been working very closely with both of these prospective joint venture partners for a way to maximize return to investors,” Rus said. ‘We need to find out how it could be worked out.”

But William M. Burd, attorney to the trustee for Hill Williams Development Corp., questioned whether there is time to complete the proposed study and a subsequent investment.

“Yes, if everything gets sold piecemeal then the overall recovery is going to be minimal,” Burd said. “But you can’t jeopardize the rights of the senior lien holders” with a plan that may or may not succeed, Burd said.