Oceanwide Plaza: $470M Sale Plan Faces Objections

More than two years after contractors forced Oceanwide Plaza LLC into an involuntary chapter 11, the estate is seeking confirmation of a liquidating plan built around a $470 million credit-bid sale of downtown Los Angeles's unfinished "graffiti towers." The confirmation hearing has been continued repeatedly while the U.S. Trustee and a community-benefits coalition press objections. The case is before Judge Deborah J. Saltzman in the U.S. Bankruptcy Court for the Central District of California (Los Angeles Division), case number 2:24-bk-11057-DS, on an involuntary petition filed February 13, 2024 and an Order for Relief entered March 11, 2024.

The debtor's only material asset is Oceanwide Plaza, a roughly $2 billion mixed use development at 1101 South Flower Street across from Crypto.com Arena. Construction on the three-tower complex began in 2015 and stopped in early 2019 when funding from parent China Oceanwide Holdings ran out, leaving a partially finished site that later drew graffiti and trespassing. The parent faced liquidation orders in Bermuda and Hong Kong in 2023, leaving the estate to pursue a court-supervised sale of the stalled project.

Debtor(s)	Oceanwide Plaza LLC
Court	U.S. Bankruptcy Court, Central District of California (Los Angeles Division)
Case Number	2:24-bk-11057-DS
Judge	Hon. Deborah J. Saltzman
Petition Date	February 13, 2024 (involuntary)
Order for Relief	March 11, 2024
Project	Oceanwide Plaza, 1101 South Flower Street, Los Angeles
Completion Status	About 60 percent complete
DIP Facility	DTLA Lending LLC; $10 million original note at 4.90%; increased to about $16.7 million by 2025
Senior Secured Claims	LADI (EB-5 line) $230 million; Lendlease mechanic's lien $168,950,128.56
Restructuring Approach	Liquidating plan and 363 sale; Oceanwide Liquidating Trust
Purchase Agreement	$470 million to KPC Square LLC (about $400 million LADI/Lendlease credit bid + up to $70 million cash)
Plan Status	Conditionally approved February 25, 2026; impaired voting classes accepted; confirmation continued

Open the public case profile for docket context, hearings, advisors, and plan updates.

Involuntary Filing and the Graffiti Towers

The case began on February 13, 2024 when a group of contractors filed an involuntary chapter 11 petition against Oceanwide Plaza LLC. The petitioning creditors were Lendlease (US) Construction Inc., Standard Drywall, Inc., Star Hardware, Inc., Woodbridge Glass Inc., and Mitsubishi Electric US, Inc., with Lendlease saying it was owed about $4.3 million. The debtor answered and consented to relief, and the court entered the Order for Relief on March 11, 2024, converting the involuntary case into an administered chapter 11 organized around preserving and selling the unfinished project.

China Oceanwide Holdings acquired the site in 2013 for about $174 million and began construction in 2015. Public descriptions of the project cite a 49-story Park Hyatt hotel tower with about 183 hotel rooms, two residential towers with about 504 condominium units, about 160,000 square feet of retail space, and roughly 1,412 parking spaces. Reporting on the sale process put the overall scale at roughly two million square feet and said about $1.2 billion had already been spent before work stopped. Interior work paused in early 2019 when funding stopped, and reporting has linked the halt to currency exchange restrictions and the parent's broader financial distress.

The stalled site drew public attention in late 2023 after trespassers and graffiti artists tagged multiple floors of the towers, which sit within view of venues slated to host the 2026 World Cup and 2028 Summer Olympics. Los Angeles officials approved about $3.8 million in city funds for the property, split between about $1.1 million for fencing and roughly $2.7 million for security and graffiti removal, after the city set a February 17, 2024 abatement deadline that the developer did not meet. A city office said the municipality should not bear abatement costs on privately owned property, and the debtor later sought DIP funding for maintenance, security, and insurance expenses.

DIP Financing and the DTLA Lending Facility

The debtor obtained postpetition financing from DTLA Lending LLC to fund maintenance, security, insurance, payroll, and professional and U.S. Trustee expenses needed to prevent further impairment of the property. The court entered an Interim DIP Order on April 26, 2024 and the Final DIP Order on May 16, 2024. The promissory note documented a $10 million facility at a fixed annual interest rate of 4.90 percent, maturing at the earliest of acceleration after default, the closing of a sale of the property, or twelve months from closing, and secured by a deed of trust on the project with a carve-out for clerk, U.S. Trustee, and professional fees funded through the budget.

The facility was increased and extended repeatedly as the case stretched well beyond its original timeline. Court-approved stipulations raised the principal to $12.9 million in November 2024, added another $840,552.38 in March 2025, and increased it to $16,679,105 by September 2025, while maturity was extended in stages from June 2025 to December 2025 and then to March 31, 2026 under the fourth amendment. In May 2026 the court approved a fifth amendment authorizing additional borrowing for critical expenses during the extended confirmation period. Under the proposed plan, each allowed DIP facility claim is to be paid in cash from sale proceeds at closing, with priority second only to allowed secured tax claims.

Secured-Claim Stipulation and Lien Priority Litigation

The capital structure centers on two senior secured positions whose relative priority was contested for most of the case. The DIP motion describes L.A. Downtown Investment LP ("LADI") as holder of the project's EB-5 investor credit line, with approximately $125.5 million disbursed and an asserted secured claim of about $180 million including interest. Lendlease (US) Construction Inc. and its subcontractors asserted mechanic's lien claims arising from the stopped construction, and the competing lien-versus-deed-of-trust priority dispute drove much of the 2024 litigation over whether claims could be used in a credit bid.

A November 2024 bench trial in Los Angeles County Superior Court examined which parties held priority over the construction liens and first deed of trust. In February 2025, the court issued a ruling placing L.A. Downtown Investment LP in first priority, with contractor liens subordinated to the deed of trust, allowing LADI to recover in full ahead of the contractor lien claims. EB-5 investors in the project were separately confirmed to hold a senior debt position in the capital structure.

Those disputes were resolved in early 2026. On January 28, 2026 the debtor filed a Rule 9019 motion to approve a compromise among the principal creditors, which the court granted on February 3, 2026 over written oppositions on shortened notice. In parallel, the court approved a stipulation fixing the senior secured-claim amounts, allowing the LADI secured claim at $230,000,000 and the Lendlease secured claims at $168,950,128.56 in the aggregate (components of $97,600,872.56 and $71,349,256.00). Liquidating those two positions set the stage for them to be credit bid under the plan. External reporting on the deal also described roughly $180 million tied to EB-5 investors and about $18 million in county tax claims, with total estimated completion costs of approximately $1.5 billion. China Oceanwide Holdings' own liquidation proceedings in Bermuda and Hong Kong, which coincided with a trading suspension in the parent's shares, are separate from the Oceanwide Plaza chapter 11.

$470 Million Credit-Bid Sale and the Liquidating Plan

The debtor first pursued a sale in 2024. The court entered a Bidding Procedures Order in June 2024, setting a stalking horse deadline of July 1, 2024, a bid deadline of August 15, 2024, an auction scheduled for September 17, 2024, and an outside closing date of October 31, 2024. The debtor retained Colliers and Hilco Real Estate as co-brokers; reporting said 91 parties signed confidentiality agreements and required bidders to show development experience, a financing plan, and a deposit equal to 3 percent of the bid amount. A reported stalking horse bidder missed deadlines in July 2024, and the 2024 process did not close on its original timeline. By August 2025, reporting described the field as narrowed to two serious bidders, one domestic and one international, with an expected price around $450 million.

The 2024 plan track also set a California confirmation milestone that later slipped. After the debtor filed its initial liquidating plan and disclosure statement on July 10, 2024, the September 9 disclosure-statement order set an October 8, 2024 voting deadline and an October 16, 2024 confirmation hearing, but the estate ultimately moved to the 2026 combined plan and $470 million credit-bid transaction.

On February 23, 2026, the debtor filed a combined disclosure statement and liquidating plan, and on February 25, 2026 the court entered an order conditionally approving the plan for solicitation. The confirmation motion values total consideration at $470 million, consisting of approximately $400 million in credit-bid consideration applied against the allowed LADI and Lendlease secured claims, plus up to $70 million in cash. External reporting identifies the purchaser as KPC Square LLC, a joint venture of The KPC Group and Lendlease, with The KPC Group led by Riverside developer Kali P. Chaudhuri; the bidder pool narrowed from five prospective buyers to that bid as providing the highest estate value.

The purchase and sale agreement includes a fiduciary-out mechanism. To displace the purchaser, a competing "Alternative Transaction" must provide a cash price at least equal to the agreement's consideration, plus payment in full of the LADI and Lendlease secured claims, plus a topping increment of 3 percent of the consideration, with an outside closing date 45 days after termination and full cash payment of the DIP facility claim. A competing letter of intent filed by John Johnson of MB2 surfaced on the docket on May 11, 2026, during the extended confirmation period.

The plan is a liquidating plan rather than a reorganization because the principal asset is the unfinished real estate. The plan supplement establishes the Oceanwide Liquidating Trust, with Bradley D. Sharp of Development Specialists, Inc. as Liquidating Trustee. On the effective date, the plan administration assets remaining after the sale closes, together with contributed assets and claims, transfer to the trust, which is charged with monetizing those assets, administering and objecting to claims, and making distributions to beneficiaries. The plan establishes an eight-class structure summarized below, with senior classes paid from sale proceeds before junior classes recover.

Class	Claim	Treatment	Voting Result
1	Secured tax claims	Paid in full; unimpaired	Deemed to accept
2	LADI secured claim ($230,000,000)	Allowed and compromised; basis of credit bid	Accepted (1 ballot)
3	Lendlease secured claims ($168,950,128.56)	Allowed and compromised; basis of credit bid	Accepted (2 ballots)
4	Junior secured claims	Deficiency treated as unsecured; not paid in full	Accepted (1 ballot)
5	Other priority claims	Paid in full; unimpaired	Deemed to accept
6	General unsecured claims	No recovery anticipated	15 accept / 1 reject
7	Intercompany loan claims	Impaired; no recovery anticipated	No ballots
8	Equity interests	Impaired; no recovery; deemed to reject	Deemed to reject

Stretto's voting declaration tabulated the impaired voting classes, and Classes 2, 3, 4, and 6 all voted to accept. In Class 6, sixteen general unsecured ballots were cast, with fifteen creditors holding $133,311,705.57 voting to accept and one, Lexington Insurance Co. with a $252,000 claim, voting to reject. Because junior secured, general unsecured, intercompany, and equity classes are projected to receive little or nothing, confirmation depends on cramdown of the dissenting and deemed-rejecting interests, supported by the accepting senior classes.

Contested Confirmation and Repeated Continuances

Confirmation is contested, and the hearing originally set for April 9, 2026 has slipped repeatedly. The U.S. Trustee filed an opposition arguing the plan is "patently unconfirmable as a matter of law," objecting to an exculpation clause it contends is inconsistent with Blixseth v. Credit Suisse, a discharge-like injunction it says is impermissible for a liquidating debtor under section 1141(d)(3), and non-debtor injunctions purporting to protect the not-yet-existing Liquidating Trustee and the purchaser through "deemed" rather than actual creditor consent. The U.S. Trustee earlier filed a motion to dismiss or convert in June 2024 based on the debtor's failure to maintain property insurance, which the debtor opposed on the basis that DIP-funded insurance and security had improved conditions and that conversion would jeopardize the sale process.

A community-benefits coalition led by Strategic Actions for a Just Economy objected that obligations in the project's Disposition and Development Agreement and Community Benefits Program are equitable servitudes that run with the land under California law and cannot be extinguished through a section 363(f) free-and-clear sale or rejected as executory contracts. Los Angeles County opposed confirmation, and additional objections came from the City of Los Angeles, Woodbridge Glass, Inc., and Carrara, Inc., the latter tied to an administrative-expense and stored-materials dispute that the court denied in May 2026. The parties filed successive stipulations to continue the confirmation hearing through May 2026, and no confirmation order, sale order, or effective-date notice had been entered as of the latest available docket.

The estate's professionals include Bryan Cave Leighton Paisner LLP as debtor's bankruptcy counsel and GlassRatner Advisory & Capital Group (a B. Riley company) as financial advisor, both of which filed interim fee applications in May 2026, along with special counsel Ralls Gruber & Niece LLP, Development Specialists, Inc. as the responsible-person and trustee platform, and Stretto as voting, solicitation, and claims agent.

Valuation and Completion Economics

Valuation has been contested throughout the case. A 2021 appraisal referenced in reporting placed the as-is value around about $313 million with a stabilized value around about $1.4 billion, while a Colliers appraisal cited in 2024 marketing coverage estimated an as-is value near about $434 million. Creditors argued that the debtor's assumptions overstated what a buyer would pay for a project in its current condition, given the cost to fund completion. Estimates of remaining construction costs ranged from about $865 million in 2024 reporting to approximately $1.5 billion following the 2026 settlement, costs that fall on top of any acquisition price. The $470 million purchase and sale agreement recovers value primarily through the senior secured credit bid rather than fresh cash.

Key Timeline

Date	Event
February 13, 2024	Involuntary chapter 11 petition filed
March 11, 2024	Order for relief entered
April 26, 2024	Interim DIP order entered
May 16, 2024	Final DIP order entered (DTLA Lending, 4.90%)
June 21, 2024	Bidding procedures order entered
June 26, 2024	U.S. Trustee motion to dismiss or convert filed
July 10, 2024	Initial liquidating plan and disclosure statement filed
September 17, 2024	Auction date set under 2024 bidding procedures
October 16, 2024	2024 confirmation hearing scheduled under the original plan track (superseded by 2026 combined plan)
November 22, 2024	DIP principal increased to $12.9 million
March 14, 2025	DIP principal increased by $840,552.38
September 29, 2025	DIP principal increased to $16,679,105
January 28, 2026	Rule 9019 creditor settlement motion filed
February 2, 2026	Order approving LADI/Lendlease secured-claim stipulation
February 23, 2026	Combined disclosure statement and liquidating plan filed
February 25, 2026	Order conditionally approving plan; solicitation schedule set
March 20, 2026	Voting and plan-objection deadline
April 9, 2026	Confirmation hearing continued / off calendar
May 11, 2026	Competing letter of intent filed (John Johnson / MB2)
May 2026	Fifth DIP amendment approved; confirmation hearing again continued

Frequently Asked Questions

Why is Oceanwide Plaza LLC in chapter 11?

Contractors led by Lendlease filed an involuntary petition on February 13, 2024 to force a sale of the unfinished project after stating they were owed about $4.3 million. Construction had stopped in 2019 when parent China Oceanwide Holdings ran short of funding, and the parent later faced liquidation proceedings in Bermuda and Hong Kong.

What is the structure of the $470 million sale?

The confirmation motion sets total consideration at $470 million: approximately $400 million in credit-bid consideration applied against the allowed LADI and Lendlease secured claims, plus up to $70 million in cash. External reporting identifies the buyer as KPC Square LLC, a joint venture of The KPC Group and Lendlease.

Who are the senior secured creditors?

A February 2026 stipulation allowed L.A. Downtown Investment LP's EB-5-related secured claim at $230,000,000 and Lendlease's mechanic's lien claims at $168,950,128.56. External reporting also describes roughly $180 million tied to EB-5 investors and about $18 million in county tax claims.

Why is confirmation taking so long?

The April 9, 2026 confirmation hearing was continued amid objections. The U.S. Trustee argues the plan's exculpation and injunction provisions are unconfirmable for a liquidating debtor, and a community-benefits coalition contends the project's Community Benefits obligations survive a free-and-clear sale. No confirmation order had been entered as of the latest available docket.

How were the senior claims credit bid?

The February 2026 stipulation and Rule 9019 settlement liquidated and allowed the two senior secured positions, which together total approximately $399 million and form the roughly $400 million credit-bid component of the $470 million sale.

Who is the claims agent for Oceanwide Plaza LLC?

Stretto, Inc. serves as the claims, noticing, and solicitation agent. Stretto administers the official claims register and tabulated the ballots for the 2026 combined-plan voting process.

For more on real estate and hotel bankruptcy restructurings, see coverage of the Lodging Enterprises credit-bid liquidation and the BY Hotel SPE-3 chapter 11 case.