Oceanwide Creditors Reach Bankruptcy-Exit Deal

Creditors for the graffiti-covered Oceanwide Plaza towers in Downtown Los Angeles have struck a deal to get the $1.2 billion development out of bankruptcy.

The new bankruptcy-exit agreement, which settles a dispute between creditors over the residential complex, sets the stage for a potential sale after Oceanwide Holdings invested approximately $1.2 billion in the effort, Bloomberg reported. An unnamed investor is already negotiating to buy the property, according to Bloomberg.

Oceanwide filed for bankruptcy in 2024 and has failed to attract a buyer since then, in part due to the cost of completing the project and preparing for residential and retail tenants once acquired. “We get a lot of interest, and it’s just finding a billion and a half dollars to complete the project is proving difficult,” Colliers’ Mark Tarczynski, part of the team marketing the building, told The Real Deal last year.

Oceanwide Holdings owes roughly $400 million to creditors, including $180 million to EB-5 visa investors, $175 million to contractors led by Lendlease Corporation and $18 million for county taxes, TRD previously reported. Under the bankruptcy-exit agreement, lender group LA Development Investment LP is entitled to a $230 million claim. Other creditors also have hundreds of millions of dollars in additional claims.

“A prompt sale and eventual completion of the project is a major priority for the city and the public at large, particularly with the upcoming 2028 Olympic Games in Los Angeles,” lawyers for Oceanwide Plaza said in a court filing late last month, noting the city “fully supports the approval of the [bankruptcy] settlement agreement.”

In reaching the settlement agreement, creditors and the project owner put an “immediate stop” to the “value-destructive litigation, preserving estate assets and allowing the debtor to pivot from endless legal battles to the productive work of selling the project and confirming a plan,” lawyers for Oceanwide said in the filing.

Construction at Oceanwide Plaza has been stalled since 2019 when China Oceanwide ran out of funding for the project. The buildings were never fully enclosed, leaving them open to members of the public trespassing and marking the street-facing floors with graffiti. In the post-pandemic years, the buildings became symbolic of Downtown Los Angeles’ tepid office market — a period from which it still has yet to emerge. — Chris Malone Méndez