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Retirement system may be in trouble

June 9, 2008 7:26:23 AM PDT
There's potential trouble for the California public employees' retirement system.A real estate partnership that CalPERS is a major investor in, has filed for bankruptcy.

CalPERS is a major investor in LandSource Communities Development. LandSource has been trying to restructure its massive debt for several months now, so the Chapter 11 bankruptcy filing is not a big surprise, but it's not good news for CalPERS.

LandSource made the announcement late Sunday.

The real estate partnership's assets include 15,000 acres of undeveloped land north of Los Angeles in the Santa Clarita Valley.

LandSource has received a $135 million line of credit from a group of lenders led by Barclays Bank so that it can operate during the Chapter 11 period.

CalPERS is the largest public pension fund in the U.S., with $254 billion in assets that provides healthcare and retirement services for about 1.5 million public employees.

LandSource said it expects to survive the current real estate downturn and credit crisis.

 

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