Crescent Resources, the land management and development company jointly owned by Morgan Stanley Real Estate and Duke Energy, has voluntarily filed for Chapter 11 bankruptcy protection.
The company, which targets the South East and South West of the US, said in a statement the filing would help it reduce and restructure its debt.
Morgan Stanley Real Estate bought a 49 percent stake in Crescent Resources, originally a real estate subsidiary of Duke Energy Corp, through its $1.75 billion MSREF V vehicle. Duke retained a 49 percent share, while Crescent chief executive Art Fields owned the remainder.
As part of the deal, Crescent borrowed $1.2 billion of new debt, with most of it distributed back to Duke. At the time, the transaction valued Crescent at $2.1 billion.
In a statement today, Crescent said the company had secured $110 million in debtor-in-possession financing. It also revealed that Fields would retire, stepping down as chief executive to be replaced by Andrew Hede, a managing agent with advisors Alvarez & Marsal and currently acting as Crescent’s chief restructuring officer.
Hede said Crescent had been actively talking with lenders to “bring our capital structure in line with the current economic environment. We intend to reach an agreement on our new capital structure and emerge from bankruptcy quickly.”