The William Lyon Homes company is asking for note-holder approval Dec. 16 so it can file a prepackaged Chapter 11 petition it already has worked out with some note holders, including its largest.

The home-builder said it will keep operating during the reorganization and plans "no impairment of any business relationships and full payment of all obligations to the company’s business partners, vendors and employees."

Media reports have identified the biggest note holder as New York-based hedge fund Luxor Capital.

Lyon Homes had announced Nov. 14 that the reorganization plan would involve $85 million in new capital, including $25 million from the Lyon family that has controlled the company. After the deal, the Lyons will have a 20 percent equity stake and warrants for gaining another 9.1 percent, the company said.

It also said that retired Gen. William Lyon will continue to chair the board "to ensure the continuity of the business."

Lyon builds in California, Arizona and Nevada. It announced two new projects while getting the reorganization in place.