Los Angeles Graffiti Towers Bankruptcy Settlement Clears Path for Sale (LAOVI, LENDUS, DTLA)

A federal bankruptcy judge signed an order on February 2, 2026, clearing the way for the sale of Oceanwide Plaza, known as the Graffiti Towers. The agreement, filed January 28, resolves creditor disputes, establishes a claims waterfall, and paves the way for a consensual Chapter 11 plan and sale. Key allocations under the settlement: L.A. Downtown Investment LP is awarded a $230 million claim; mechanics liens held by Lendlease (US) Construction Inc. and DTLA Funding LLC total $168 million. Lendlease (US) Construction Inc. will also make a $20 million payment to Chicago Title Insurance Co. to settle disputes. The $1B mixed-use project, originally scheduled for completion in 2019, has been vacant since 2019 and became a target for taggers. In 2024, the City Council allocated $3.8M for security, fire safety, and graffiti abatement, with about $2.7M designated for security and $1.1M for fencing and ground-level security. Pending is a potential acquisition by an unnamed buyer, contingent on resolving the bankruptcy and finalizing the sale.