Neumann Homes Declares Chapter 11 Bankruptcy – Existing Homes Will Be Built
Posted by admin under: Main Oct 31
Nuemann Homes, one of the largest homebuilders in the Midwest and Denver has declared bankruptcy. The company has been building in some of the worst markets in the country including Detroit and Denver so this can not be big surprise to anyone.
In fact, Nuemann probably gets what it deserved. They acquired Tadian Homes in 2005 at the peak of the housing boom. Normally this could be excused, but Tadian builds in Detroit which was (and is) mired in a housing collapse of epic proportions. And whomever sold the idea, “Hey, the auto industry is laying off hundreds of thousands, lets go grab a bunch of market share in Detroit” should both be shot and hired at the same time. Shot because their business sense is so wrong, but hired because they must be a heck of a salesman.
Add to that being a major player in Denver which is another city hard hit by the housing slowdown you have the recipe for disaster.
Neumann said it will file for Chapter 11 bankruptcy and that its lenders have agreed to provide limited additional funding so that its assets can be evaluated and sold. It also said the earnest money of customers whose new homes haven’t started construction is safe in escrow. Neumann said it will ask a bankruptcy judge to approve refunds from those accounts…
“The market downturn in the Chicago and Denver housing markets [is] now in excess of 50 percent, with home prices dropping from 10 percent to 25 percent in some sub-markets,” Kenneth Neumann commented in the fax. “Even after the significant help we have received from our lenders this year, the company can no longer weather this storm.” via CHICAGO SUN-TIMES
Source: Neumann Homes Declares Chapter 11 Bankruptcy – Existing Homes Will Be Built
Wednesday, October 31st, 2007 at 3:28 pm and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.