Village Homes, deveoper of Granby-area homes, files for Chapter 11 bankruptcy protection
November 12, 2008
Village Homes, a major developer within Granby Ranch, in Granby, Colorado, filed for Chapter 11 reorganization protection last week in the U.S. Bankruptcy Court of Colorado.
The 24-year-old Colorado company accounts for a total of 200 future and existing single-family and townhome units in three neighborhoods of Granby Ranch.
“They are still maintaining sales presence,” said Granby Ranch CEO Joe Malone.
The Village Homes company has promised continued construction of homes under contract, he said, as well as continued sales of properties in the resort community “while they sort things out for themselves.”
Statements released from Village Homes emphasize the company “still plans to operate normally in relationships with homebuyers and current homeowners.”
Malone compared the Village Homes’ situation to that of other Chapter 11 companies that still manage to continue with “business as usual,” such as major airline companies.
“Village Homes has chosen to reorganize so that we may continue to do business in light of the current realities of the housing market,” said Chief Operating Officer and President Cheryl Schuette in a Nov. 6 press release. “Unfortunately, a troubled mortgage and credit industry, expanding home inventories, rising foreclosure rates, downward trends in home and land prices and reduced consumer confidence have made this action necessary.”
By filing, the company says it hopes to “pay trade partners who have asserted mechanic’s liens against the company’s property,” as well as “generate cash flow and deleverage our balance sheet.”
Efforts to talk to Schuette personally Wednesday were unsuccessful.
Chapter 11 bankruptcy allows a company protection from creditors while it restructures its business, usually by downsizing and narrowing focus, according to LawyerShop.com.
“Companies may be in Chapter 11 bankruptcy and you’d never know it,” Malone said.
Meanwhile, Malone said Granby Ranch as a whole is managing despite the economic crunch. During the Granby Town Board meeting Tuesday, Granby Ranch officials sought and were awarded multi-year extensions to some subdivision improvement agreements pertaining to future neighborhoods.
“We’re satisfied with sales this year, especially considering the full economic climate,” Malone said, adding that the development plans to focus on sales of existing neighborhoods before bringing on more planned ones.
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