Wednesday, April 22, 2009
The move went into effect Tuesday. The Harleysville, Pa., company said the “recession and the collapse of the housing market have had a negative impact on the company’s operations” and that it is trying to restructure the company and its “obligations” so it can proceed with constructing and developing residential properties throughout the region.
The company was formed in 1992 and called THP for The Hendricks Properties. The company was formed by a partnership between brothers Tim and Todd Hendricks, whose father was a custom builder. The company developed residential communities mostly in Montgomery County but also had projects in New Jersey and the Lehigh Valley and focused for the most part on the first-time homebuyer.
Another regional builder to be hit by the recession and bust of the housing bubble is the Elliott Building Group of Langhorne, Pa. In June 2007, Elliott filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of New Jersey, saying it needs a “breathing spell from aggressive creditor action.” It was later liquidated and its communities still under development were auctioned off.
The bankruptcy filing by Elliott was the first of what is expected to be an eventual surge in bankruptcies by regional builders, who rapidly grew during the heady days of the real estate boom but got caught with the credit crisis and recession where home sales dramatically fell.
Wednesday, April 1, 2009
Hollywood, Fla.-based TOUSA, which operates in Austin under the Newmark Homes brand, said in a letter to the Texas Workforce Commission that it will "wind down its current business operations" in coming months.
The letter said the first layoffs will happen in May, with the rest staggered through the remainder of the year.
TOUSA (TOUSQ) has been in bankruptcy since January 2008. The company said in a recent statement that it would stop building new homes and focus on selling its remaining inventory of speculative homes and its land holdings.
Customers with homes under construction “can be assured that their homes will be completed,” the company said in a news release.
“While the market environment has impaired our ability to maintain our historical operating platform, we will continue to build out homes and sell our existing inventory during this process," CEO John Boken said in the release. The process, he said, would continue for “a few years.”
The homebuilder was delisted from the New York Stock Exchange on May 13, 2008.
In a public filing March 19, the company said it would attempt to get its hands on as much money as it could through the bulk sale of land and homes.
“The housing market has continued to deteriorate significantly since June, and we have not yet completed the analysis and processes required for the preparation of our quarterly report … for the period ended Sept. 30, 2008,” the filing said.
For the three-month and six-month periods ended June 30, 2008, TOUSA reported a loss from continuing operations, net of taxes, of $379.1 million and $661.8 million, respectively, compared with $122.1 million and $184.3 million, respectively, for the same periods in 2007.
The company said it was continuing to implement “strategies to aid our liquidity and our ability to continue as a going concern.”
However, the company noted in its public filing that it might not be successful.
Developer James Rhodes on Tuesday night filed a petition for bankruptcy on behalf of many of his key businesses, including Rhodes Design and Development Corp., listing $100 million to $500 million in assets and liabilities in the same range.
The developer filed for bankruptcy under Chapter 11, which allows the companies to continue operating while their finances are restructured. Rhodes has been one of Las Vegas' most successful and controversial developers and homebuilders. He developed Rhodes Ranch in southwest Las Vegas and Tuscany Village in Henderson. He provoked the ire of environmentalists with his development of the Red Rock Country Club community.
Rhodes drew news coverage again when Erin Kenny, the former Clark County commissioner, disclosed that Rhodes paid her $200,000 a year for consulting as part of an agreement in which she pleaded guilty to federal corruption charges. Kenny was sentenced to 30 months in prison in connection with a bribery case involving former strip club owner Michael Galardi.
The Arizona Corporation Commission questioned Rhodes about his business relationship with Kenny when he sought to establish a water utility for a master-planned community proposed in Golden Valley between Kingman and Bullhead City.
The Arizona panel also grilled Rhodes over $148,000 in fines he paid after admitting he illegally funneled campaign contributions in 2002 through employees and employees' spouses to Sen. Harry Reid, and then County Commissioner Dario Herrera. Herrera also was convicted in connection with the bribery case.
The Rhodes Companies filed the bankruptcy petition but an attachment notes that 31 affiliated companies also are seeking protection under Chapter 11 bankruptcy.
They include Rhodes Ranch General Partnership, Rhodes Ranch Golf and Country Club, Tuscany Golf Country Club, Tuscany Acquisitions and three similarly named companies, Rhodes Realty, Rhodes Homes Arizona, Rhodes Arizona Properties, Tribes Holdings, Six Feathers Holdings and Bravo.
Rhodes filed a statement explaining that he believed "it is in the best interests of the company, its creditors" and others to file for Chapter 11.
The Sunstate Companies of Las Vegas is the largest unsecured creditor and is owed $201,000, followed by G.C. Wallace of Las Vegas, which is owed about the same amount. The developer estimated that between 5,000 and 10,000 creditors will have claims in the bankruptcy case.
He hired the law firm of Pachulski Stang Ziehl & Jones, which has offices in Los Angeles and other cities, but the petition was filed by Larson & Stephens of Las Vegas.
* Comstock Homebuilding Cos inc accounting firm expressed going concern opinion
* Comstock Homebuilding Cos inc Says chosen not to make interest payment on some debt
* Comstock Homebuilding Cos inc Says working on plans to shore up balance sheet
* Comstock Homebuilding Cos inc Says attempting further restructuring of company's debt
Real estate company Comstock Homebuilding Cos Inc (CHCI.O) warned that it may have to seek bankruptcy protection if its efforts to generate free cash flow and restructure debt with its lenders proved unsuccessful.
Comstock also said its accounting firm PricewaterhouseCoopers believes declining market conditions create substantial doubt that the company would continue operating throughout 2009 as a going concern.
Comstock said sales during the first quarter remained weak as general economic conditions in its three primary markets continued to generate low levels of consumer demand for new home sales.
The company has also chosen to default on the March 31, 2009, interest payment of about $218,000 due on its senior unsecured debt to JP Morgan Ventures, due to limited liquidity.