by Garth Meyer
AES power plant owner Leo Pustilnikov staved off a foreclosure auction of the 51-acre property by filing for bankruptcy Tuesday. The auction was scheduled for Wednesday morning.
Pustilnikov’s company, 9300 Wilshire, which submitted the Chapter 11 filing, is a more-than 20 percent owner of the site.
AES, which sold the plant and surrounding acreage to Pustilnikov and 11 investors in 2020, indicated this week it may ask the courts to allow the auction to proceed.
“In October 2022, AES filed a Notice of Default to initiate a non-judicial foreclosure (NJF) to collect outstanding amounts owed in connection with the sale,” an AES spokesperson told Easy Reader Tuesday in an email.
“AES is exercising its rights under the transaction agreements, and the actions are consistent with the goal to conclude the sale of the site. Today, the owner filed for bankruptcy, which resulted in an automatic stay of the NJF. Notwithstanding the bankruptcy, AES continues to have a valid lease for the site and expects to continue operating the Redondo Beach generating units through December 31, 2023.”
Attorney Victor Sahn, who represented 9300 Wilshire in the filing, said Wednesday, “Chapter 11 was filed to preserve the property and its value, and keep the foreclosure sale from taking place.”
Sahn stated that Pustilnikov and his partners hope to retain the property.
Do they have a chance?
“It’s hard to know at this point, [but[ that is our intention,” Sahn said.
A meeting of the creditors is scheduled for March 23, according to the U.S. Bankruptcy Court, Central District of California.
“It’s really hard to say what happens next. It puts things in limbo again,” Redondo Beach District Two City Councilman Todd Loewenstein said.
Pustilnikov and his group of 11 investors bought the power plant site from AES for an undisclosed sum. Last fall, the new owners fell behind $36 million in payments, due to what Pustilnikov described as a “true-up over accounting,” which would shortly be resolved.
He said the matter stemmed from the two extensions the state granted to keep the plant in operation as a backup for the California power grid. The state originally extended the life of the 1954 plant for one year – and then added another two years.
Last summer, Pustilnikov filed an application with the City of Redondo Beach to build 2,700 apartments on the site, along with commercial development and green space. ER
