LeFever Mattson: Settlements Narrow April Confirmation Fight

LeFever Mattson's chapter 11 cases have shifted from an emergency effort to stop foreclosures into a liquidation process centered on a plan fight scheduled for April 13 through April 15, 2026. The debtors filed on September 12, 2024 in the U.S. Bankruptcy Court for the Northern District of California, Santa Rosa Division, and the First Day Declaration said the filings were meant to halt lender enforcement, centralize investor and lender disputes, and address alleged misconduct tied to undocumented interest sales and property-sale proceeds.

Judge Charles Novack set a further status conference and omnibus settlement hearing for February 26, 2026, a pre-trial conference for April 9, 2026, and a three-day evidentiary confirmation hearing for April 13 to April 15, 2026 in the February 6 scheduling order. On March 6, 2026, the court also entered a substantive consolidation order covering the debtors and KSMP investment entities, while separate settlement orders narrowed disputes with Timothy J. LeFever, Fannie Mae, California Bank of Commerce, Comerica Bank, and the Garrett investors.

Debtor(s)	LeFever Mattson (58 jointly administered debtor entities)
Court	U.S. Bankruptcy Court, Northern District of California (Santa Rosa Division)
Case Number	24-10545
Petition Date	September 12, 2024
Judge	Hon. Charles Novack
DIP Facility	Up to $6.0 million under the first DIP proposal and up to $4.0 million under the later facility, both with 16% interest and PIK fees under the DIP motion and final second DIP order
Confirmation Date	Not confirmed; evidentiary confirmation hearing set for April 13-15, 2026

How LeFever Mattson Reached Chapter 11

LeFever Mattson was a Northern California real estate investment platform that managed more than 200 properties across Sonoma, Sacramento, and Solano counties, according to the First Day Declaration. The declaration says the property holdings were spread across roughly 50 limited partnerships and eight LLCs, while the portfolio manager employed 45 people and the debtor entities themselves had no employees.

The public reporting around the filing record describes a business already unraveling before the broader September 2024 petitions. One LeFever Mattson affiliate, Windscape Apartments LLC, filed chapter 11 on August 6, 2024, and The Press Democrat reported that scheduled Sonoma foreclosure auctions were postponed after that filing. After the full September filing wave, local coverage said the company and 57 affiliated entities had entered chapter 11 on September 12, 2024, with estimated assets between $100 million and $500 million and estimated liabilities between $10 million and $50 million.

The First Day Declaration says Timothy LeFever and Kenneth W. Mattson each held a 50% interest in LeFever Mattson. It also says that from May 2017 through March 2024, Mattson-era interest sales generated more than $45 million and that proceeds were directed to principals rather than the property entities. The declaration describes the chapter 11 cases as a way to stop foreclosure pressure, preserve property value, and centralize disputes involving secured lenders, trade creditors, investors, and alleged insider transfers.

Cash Collateral And DIP Financing

The debtors entered chapter 11 with a property-by-property collateral structure. The cash collateral motion said rents and related cash proceeds could be used only under court-approved budgets and primarily for property-level expenses, while adequate protection for consenting lenders would include debt-service payments, property maintenance, and reporting.

The final Socotra cash collateral order approved a budget period running from February 28 through May 30, 2025, gave the debtors a 10% monthly variance allowance by property, and required adequate protection payments of $418,755 for the first quarter plus $159,585 monthly beginning April 10, 2025. The order also granted Socotra a postpetition replacement lien on rents and cash collateral and required monthly collection and disbursement reports.

The debtors later sought debtor-in-possession financing on terms that reflected the pressure on the estate. The first DIP motion proposed up to $6.0 million, including a $1.2 million interim draw, 16% PIK interest, a $600,000 facility fee, and up to $145,000 in expenses. The final second DIP order later approved a facility of up to $4.0 million with 16% interest, a 4% default-rate step-up, a $400,000 PIK facility fee, and mandatory prepayments from collateral proceeds.

Property Sales And Liquidation Structure

Real-property sales became the operating backbone of the chapter 11 cases. The debtors asked for repeated sale authority through the motion to establish procedures for real property sales, and the court entered the omnibus sales procedures order.

That process eventually split into a separate set of procedures for Socotra-collateral assets. The September 5, 2025 sale motion covering six Socotra-collateral properties disclosed list prices and best offers and sought to restrict Socotra's ability to credit bid. Individual sale orders continued through early 2026 for parcels in Sacramento, Sonoma, Del Mar, and the Fresno area.

Local coverage tracked the portfolio pressure behind that liquidation track. The Press Democrat reported in September 2024 that the company had amassed at least 116 Sonoma-area properties, while the First Day Declaration describes a broader Northern California portfolio of more than 200 properties across multiple entity silos.

The Plan Fight Now Set For April 2026

The debtors and the official committee filed a third amended joint chapter 11 plan of liquidation on December 11, 2025. That plan uses a Plan Recovery Trust structure that would take trust assets on the effective date. Administrative, DIP, professional-fee, involuntary-gap, and priority-tax claims are left unclassified and generally payable in cash or on agreed terms, while Classes 3 through 5 are impaired and voting and Classes 6 through 8 are impaired and deemed to reject.

The plan also sets out treatment rules that matter to investor recoveries. According to the third amended plan, trade claims could be paid from a dedicated settlement fund if Class 4 accepted, or otherwise share pari passu with Investor Tranche 1 claims. The plan also provides for investor claims to be netted against prepetition distributions within a seven-year lookback window.

The confirmation schedule has moved more than once. The January 27, 2026 order vacated previously proposed March and early-April confirmation dates because of the court's availability and reset the matter for a February status conference. The operative February 6 scheduling order then set the current April 13 to April 15 evidentiary hearing, along with discovery, expert, exhibit, witness-list, and motions-in-limine deadlines that run through April 9, 2026.

Public reporting also shows the plan vote context behind that hearing calendar. In February 2026, The Press Democrat reported that the proposed LeFever settlement removed a potential objection to a plan that had received 95% support on investor ballots.

March 2026 Settlements Narrowed The Opposition Field

The largest late-stage development was the settlement with Timothy J. LeFever and certain affiliates. The February 2 compromise motion said the LeFever parties would deliver more than $5 million in value, including a $4.725 million cash payment, waiver of a $290,000 promissory note, liens on LeFever real estate to secure performance, waiver of asserted claims and ownership interests, and an agreement not to object to the plan or share in investor recoveries. The court later approved that deal in the March 6 settlement order.

The Press Democrat reported on February 4, 2026 that LeFever and his wife agreed to pay $4.725 million in cash and waive claims while avoiding estate litigation and giving up any plan distribution.

Other March 5 orders resolved disputes with key lenders and investor constituencies. The Garrett settlement order allowed a $1.5 million Class 5 investor claim, required release of a deed of trust within 14 days of the effective date, and deemed the Garrett ballot to accept the plan. The California Bank of Commerce settlement order required CBC to pay $75,000 to the estates, treated CBC secured claims totaling $3,397,574.87 as satisfied in full, and barred plan objections so long as the plan conformed to the settlement.

The Fannie Mae settlement order allowed a secured claim of $3,343,995.77 plus the reserve account, released escrowed sale proceeds, waived any deficiency claim, and deemed Fannie Mae's ballot to accept the plan. The order also requires Fannie Mae to remit 50% of any net recovery on Timothy J. LeFever's guaranty to the estates while assigning Mattson-guaranty rights to the debtors or the plan trust. The Comerica settlement order approved another compromise, though the indexed order text does not expose the full economic terms of the attached agreement.

Substantive Consolidation And Remaining Contested Matters

On March 6, 2026, the court entered the substantive consolidation order for the debtor estates and KSMP investment entities. The March 4 hearing transcript shows Judge Novack used September 12, 2024 as the consolidation effective date and said the entities were too entangled to unwind coherently for creditors. The ruling excludes certain non-debtor entities identified at the hearing, including Pineapple Bear and Harrow Cellars.

Not every dispute is resolved. The order continuing the hearing on claim no. 68 shows that the Siroos Saifi claim objection remains active and was continued to April 8, 2026 at 11:00 a.m., with supplemental declaration and response deadlines. The scheduling order also identifies the Tillman Investor Group as the opposing party for expert and deposition scheduling under the February 6 scheduling order, which indicates that confirmation will proceed on a contested record despite the recent settlements.

External reporting has continued to focus on insider-transfer allegations around the case. The Press Democrat reported in December 2025 that estate professionals alleged LeFever Mattson had transferred millions to LeFever's mother-in-law, and earlier that month it reported that Ken Mattson had been indicted on federal fraud charges.

Professional Fees And Case Administration

The debtors retained Keller Benvenutti Kim LLP as debtors' counsel, SSL Law Firm LLP as real estate counsel, Verita Global as administrative advisor, FTI Consulting as a real estate and tax advisor, and Pachulski Stang Ziehl & Jones LLP as committee counsel.

The fourth interim fee application of Keller Benvenutti Kim LLP sought $1,192,840 in fees and $18,877.92 in expenses for September 1 through December 31, 2025 after a $20,000 voluntary reduction. The second interim fee application of FTI Consulting sought $27,979.60 in fees with no expenses for the same period, while the third interim fee application of Verita Global sought $24,603.40 and states that amount was awarded.

Frequently Asked Questions

Why did LeFever Mattson file chapter 11? The First Day Declaration says the debtors filed to stop foreclosure activity, centralize disputes with lenders and investors, and preserve value across a portfolio of more than 200 properties while they addressed alleged misconduct tied to undocumented interest sales and related-party transfers.

Has LeFever Mattson confirmed a plan? No. The February 6, 2026 scheduling order sets a pre-trial conference for April 9, 2026 and an evidentiary confirmation hearing for April 13 through April 15, 2026. The current plan on file is the third amended joint chapter 11 plan of liquidation.

What does the Timothy LeFever settlement do? The compromise motion and later settlement order provide for more than $5 million in value, including a $4.725 million cash payment, waiver of a promissory note, liens to secure performance, waiver of asserted claims and interests, and an agreement not to object to the plan or share in investor recoveries.

What is still contested in the case? Confirmation remains contested despite the recent settlements. The order continuing the hearing on claim no. 68 keeps the Saifi claim objection active into April 2026, and the February 6, 2026 scheduling order shows the Tillman Investor Group remains the opposing party for discovery and expert scheduling tied to confirmation.

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