Landcraft projects hit by creditors - Baltimore Business Journal:

lyubomiradete.blogspot.com
The company saw several of its communities fall into bankruptcytthis year. During the past month, its financiapl difficulties have resulted in a wave of new bankruptch filingsand lawsuits. Landcraft attorney Buzzy Stubbs says the company is ironin g out a deal with an investor group that could save severalp ofits developments. But Landcraft will likely emerg e from the restructuring asmaller company, as severalo of its projects are expected to be returned to lendersz through foreclosure.
“Nobody on the bank side or the developmeng side ever thought thiswould happen,” says Stubbs, a lawyer at in New “We’re trying to determine where to best invest our money to keep as many developmentzs going as we can.” Landcraft has been developinfg lots for home builders since it was founded in 1986 by Franko Martin. According to the company’s Web Landcraft sold more than 1,2000 lots in 72 neighborhoods in 2005. This five of the company’s projects filed for Since then, another 11 have also filed under Chaptetr 11 for protectionagainsyt creditors.
A group of creditors has also filed an involuntarg bankruptcy petitionagainst , which calls for liquidating the company. And severao other banks have filed civil lawsuits against Landcraft and Martin for defaulting on loans hepersonally guaranteed. Marti could not be reached this week. “Landcraft Managemen and/or the Landcraft principalzs suffered economic losses oncertain projects, cost delays and other materially adverse changes which weakened the enterprisr as a whole and endangered individual projects as well,” attorneyg John Northen, who is representing creditors in severaol of the bankruptcies, said in a courr filing.
The Landcraft communities in bankruptc y include The Rapids at Belmeade in west The Heightsin S.C., Old Towne in Forsyth County and Saddlebrook in Cabarrus County. The projects total more than 2,500 lots. The Chaptere 11 filing allows the developments to remaim in business while the managing partnershipsd try to restructurethe debt. The major creditorws in the bankruptcy casesinclude , , , and locak home builder Total debt on the 16 projects is $101 with assets of $150.
4 million, according to court Stubbs expects at least another three communities will file for bankruptcyh in the next few Northen, who represents severalo secondary mortgage holders in the suits, has filed a motionn to consolidate the cases. “The efforts to reorganize on an individual, stand-alone basisz for each limited liability company are unlikelyy to succeed and will result in excessive costs and littlew if any return for secured andunsecures creditors,” Northen, of law firm in Chapeo Hill, said in a recenyt motion. “All creditors will receivse at leastas good, if not better, treatment of their respective claims if the cases are substantively consolidated.
” Northe n did not did not return calls this week. Stubbx says Landcraft is in favorof consolidation. “It would help everybody administrativelhy to deal withthe claims,” he says. The motion hasn’tr been heard yet, but Stubbsx hopes the judge will make a decision byyear end. None of the 16 casesw has beensettled yet. But last week a bankruptcy judgee granted SunTrust permission to beginj foreclosure on the Saddlebrook The bankloaned $4.9 million for the 290-lot Stubbs expects that to be the first of several Another likely to be returned to its lender is Caledoniwa in Greenville, S.C.
, he Landcraft is working to secure fundingf from a group of investors, Stubba says, and a deal should be reache by year end. He expects the company will get as muchas $5.5 The investors and Landcraft are tryinbg to determine how to best spend that moneyy and which projects are most viable at this point. The grouo is also trying to arrange lot sales to home but those prospects have all but driedf up in the lastfew months.
“Builders can’t get constructiom loans, and home buyers can’t get mortgages,” Stubbs Of the 25 projects Landcraft is workinggon now, Stubbs thinks about 15 will be “Based on the current economic environment, I’m exceedinglty pleased that as many as that will go he says.