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 and in 2023, leaving the estate to pursue a court-supervised sale of the stalled project.
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
Case Snapshot
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.
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). With those amounts fixed, the two secured claims could 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 are separate from the Oceanwide Plaza chapter 11; a reports that the parent remains in liquidation and its shares remain suspended.
$470 Million Credit-Bid Sale and the Liquidating Plan
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.
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 at about $313 million with a stabilized value at about $1.4 billion, while a Colliers appraisal cited in 2024 marketing coverage estimated an as-is value at 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 is funded primarily through the senior secured credit bid rather than cash.
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.
opposition arguing the plan is "patently unconfirmable as a matter of law," /documents/ad2b570e-e65c-4b8d-a4a2-0e2f06f38f54/
motion to dismiss or convert /documents/dde4154f-9e5c-48dd-aabd-e4ec314bf512/
Strategic Actions for a Just Economy objected /documents/2fa91a62-532a-4924-83ce-54140b5c6e72/
stipulations to continue the confirmation hearing /documents/9f392827-f777-4aaa-a560-53ec699b6868/
Oceanwide Plaza LLC into an involuntary chapter 11 https://www.bisnow.com/los-angeles/news/construction-development/oceanwide-involuntary-bankruptcy-los-angeles-cleanup-122917
$470 million credit-bid sale https://www.bisnow.com/los-angeles/news/construction-development/oceanwide-plaza-bankruptcy-buyer-sale-470-million-133361
roughly $2 billion mixed use development https://www.archpaper.com/2024/05/what-will-come-of-downtown-los-angeless-oceanwide-plaza/
1101 South Flower Street https://www.globest.com/2024/05/09/colliers-hilco-to-list-oceanwide-plaza-for-bankruptcy-sale/
partially finished site https://abc7.com/post/abc7-investigates-graffiti-towers-downtown-los-angeles-not-cleaned/15973175/
Hong Kong https://www.bisnow.com/los-angeles/news/construction-development/oceanwide-plaza-developer-ordered-to-liquidate-122313
2013 for about $174 million https://commercialobserver.com/2024/07/oceanwide-plaza-auction/
49-story Park Hyatt hotel tower https://therealdeal.com/la/2025/08/12/oceanwide-plaza-sale-likely-to-close-by-end-of-year/
about $3.8 million https://laist.com/brief/news/la-city-council-approves-3-8-million-of-city-funds-for-oceanwide-plaza-towers
November 2024 bench trial https://www.dailyjournal.com/article/381934-trial-to-determine-who-controls-graffiti-covered-la-skyscrapers
ruling placing L.A. Downtown Investment LP in first priority https://therealdeal.com/la/2026/02/02/oceanwide-creditors-reach-bankruptcy-exit-deal/
confirmed to hold a senior debt position https://www.eb5investors.com/blog/senior-debt-status-shields-eb-5-investors-in-470m-oceanwide-bid/
Hong Kong Exchange filing https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0103/2025010302244.pdf
auction scheduled for September 17, 2024 https://therealdeal.com/la/2024/06/18/auction-scheduled-for-bankrupt-oceanwide-plaza-in-september/
missed deadlines in July 2024 https://therealdeal.com/la/2024/07/23/buyer-for-bankrupt-oceanwide-plaza-in-los-angeles-falls-through/
The KPC Group and Lendlease https://www.globenewswire.com/news-release/2026/02/24/3243135/0/en/Bankruptcy-Plan-Filed-to-Pave-Way-for-Sale-of-Oceanwide-Plaza-Downtown-Los-Angeles-Graffiti-Towers.html
GlassRatner Advisory & Capital Group https://glassratner.com/blog/glassratner-advises-oceanwide-plaza-llc-on-chapter-11-restructuring/
Stretto https://cases.stretto.com/oceanwideplaza/
about $313 million https://www.bisnow.com/los-angeles/news/construction-development/value-of-oceanwide-plaza-far-less-than-developer-thinks-it-is-creditor-argues-123391
Combined disclosure statement and liquidating plan filed https://www.latimes.com/business/story/2026-02-23/oceanwide-plazas-graffiti-towers-sold-downtown-la
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.