PaintSquare.com
      | Connect Follow us on Twitter Like us on Facebook
About | Subscribe | Advertise
  

 

Paint and Coatings Industry News

Main News Page


Homebuilder Seeks Bankruptcy Reorganization

Monday, March 8, 2010

Comment | More

Orleans Homebuilders Inc., a fixture on the Pennsylvania and New Jersey construction scene for generations, has filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code for itself and most of its operating subsidiaries.

The petition was filed in the U.S. Bankruptcy Court for the District of Delaware in Wilmington, the company announced March 1.

Certain Orleans subsidiaries are excluded from these petitions, including its mortgage services subsidiary, Alambry Funding, Inc., which provides mortgage brokerage services for customers and financial institutions but does not underwrite any customer mortgages.

"We regret the hardship that this filing will have on many of our trade suppliers,” said company CEO, president and chairman Jeffrey P. Orleans. “We are arranging new financing that should be available almost immediately, pending Court approval and syndication. We expect these new funds will be sufficient to support our operations while we are under Court jurisdiction."

The company issued this statement:

“The voluntary petitions result from the final maturity of the Company's $350 million senior secured Second Amended Restated Revolving Credit Loan Agreement (as amended, the "Credit Facility") on February 12, 2010, and the inability to reach agreement on an extension of the Credit Facility with 100% of the approximately 17-member bank group, or obtain a replacement of the Credit Facility. There is currently approximately $311 million of cash borrowings outstanding under the Credit Facility, excluding any letters of credit.

“The Company also announced that it has reached agreement with certain of its lenders for up to $40 million of debtor-in-possession (DIP) financing, pending Court approval and syndication. The new financing consists of up to $25 million in cash revolving borrowing availability and up to $15 million of availability for replacement letters of credit under the Credit Facility (the "DIP Revolving Facility").

All of the Company's 11 operating divisions in eight states will continue business in the ordinary course and without interruption. The Company has filed motions requesting immediate Court approval for the continuation of all home warranty and mortgage incentive programs and to preserve all pre-petition escrowed customer deposits on contracted homes.

“The Company believes all existing customer deposits are protected in segregated escrow accounts and are not affected by today's filing. Building will now continue on homes under construction in all communities, as well as the closing of certain home deliveries temporarily postponed in the past two weeks.”

Added Orleans, the CEO: "We have done everything we could to generate cash flow and to reduce operating expenses in light of falling home prices and reduced housing demand, yet still provide a high level of service to our many customers. We reduced our bank debt by approximately 40%, from $513 million at Jan. 1, 2007, to approximately $311 million today.

"During this protracted downturn, most of our lenders, junior creditors and vendors had been supportive of the Company. In early December 2009, we approved a non-binding term sheet for a maturity extension of the Credit Facility; in mid-December 2009, the Company and 100% of the bank group extended the maturity of the Credit Facility to February 12, 2010. During this period of time, we executed a non-binding letter of intent relating to the sale of the Company. However, the lenders could not achieve 100% lender approval of the documentation for a maturity extension or any other modification beyond February 12, 2010. The Credit Facility then matured, and we could not complete the sale. We intend to continue to pursue a sale of the Company through a negotiated sale, a plan of reorganization or other auction under Chapter 11. We want to reassure our many current and future homebuyers that we will seek to continue to service their needs during this period. We appreciate the support of our many loyal vendors, customers and employees."

The company has filed first-day motions asking the court to approve, among other things, payment of employee wage and benefit charges that were incurred before the petitions were filed, future employee wages and benefits, incurred commissions, the continuation of certain customer sales incentive programs, and the continued use of cash collateral and existing cash management systems.

Although Chapter 11 law prohibits payments for any invoices that were outstanding at the time of the filing without prior court approval, it does provide greater protection to those providers of goods and services who conduct business with the company from this point forward. The company has also filed a motion to honor prepetition claims for certain critical vendors whose goods and services are deemed essential to operations.

The company is providing information about the reorganization at www.orleanshomesreorg.com.

Based in suburban Philadelphia, Orleans Homebuilders Inc. develops, builds and markets single-family homes, townhouses and condominiums in Pennsylvania, New Jersey, New York, North Carolina, Virginia, Illinois and Florida.

   

Tagged categories: Home builders; Residential

Comment Join the Conversation:

Sign in to our community to add your comments.

Nationwide Overspray
Profession Overspray Removal Services

The Finest Name in Safe Overspray Removal. We specialize in removing all contaminants from any surface. Family Owned and Operated for 33 years! Fully insured. Satisfaction is guaranteed.


SSPC: The Society for Protective Coatings
http://www.sspc.org/

Join SSPC and Enhance
Your Career !


NLB Corporation
MiniARM automates surface prep

NLB’s Mini ARM lets an operator control high-pressure water jets remotely, with fast tool changes for different jobs. It maximizes protection and productivity.


HoldTight Solutions Inc.
NO FLASH RUST -
NO CONTAMINANTS

Our HoldTight®102 salt remover & flash rust preventer prevents flash
rust by removing surface contaminants. It has no equal; only wannabees.
Contact us for your
nearest distributor.
(800) 319.8802 sales@holdtight.com


Wasser High-Tech Coatings Inc.
Wasser Coatings Protect

Wasser Coatings offer a complete range of Moisture Cure Urethane (NEPCOAT approved) systems in addition to Polyurea membranes and linings(NSF).
www.wassercoatings.com


Atlas Material Testing Technology

Helping You Put Your Products To The Test

• Outdoor Accelerated
Weathering
• Laboratory Testing
Services
• Accelerated Weathering
Instruments

www.atlas-mts.com atlas.info@ametek.com


RPB Respiratory
AN INSTANTLY CLEAN VISOR? HOW IS THAT POSSIBLE?

With RPB Safety’s new Nova 3 Cassette Lens System which has been specifically designed to save you time and money! See the benefits for yourself now!


KTA-Tator, Inc. - Corporate Office
KTA-Tator
Coatings Inspection

Any structure, any height, any place - A qualified coatings inspector is always available. Call 800-245-6379.


AGC Chemicals
LUMIFLON®FEVE Resin Used On Vibrant Red Bridge

LUMIFLON based coatings can last up to 30 years without fading, offering a low-maintenance solution that retains color and gloss and can be field-applied.

 
 
 
Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us
 

© Copyright 2000-2015, Technology Publishing / PaintSquare, All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail webmaster@paintsquare.com