A U.S. bankruptcy judge in Delaware cleared the way Monday for a home builder to buy back, at a substantial discount, a chunk of the Newhall Ranch development north of Los Angeles that it sold for nearly $1 billion to the California state retirement system in 2007.

Lennar Corp. said in a news release that it paid $138 million for a 15 percent stake in a new company, to be called Newhall Land Development Co. Five lenders will own the other 85 percent.

The agreement concludes a fiasco for the California Public Employees’ Retirement System, the nation’s largest pension fund, which lost its nearly $1-billion stake. The new company will be managed by Lennar’s chief investment officer, Emile Haddad, who is leaving the Florida home builder to head the venture.

In 2007 Lennar, one of the nation’s largest home builders, sold 68% of the development, which covers 15,000 acres in Newhall and Valencia, to CalPERS for $970 million. The purchase, made at the height of the real estate bubble, was one of several disastrous investments that led to CalPERS’ losing roughly $3 billion in residential real estate in 2008.

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