Barratt American - private home builder

Update 2009-08-08: According to the San Diego Daily Transcript Barratt has changed their bankruptcy filing from Chapter 11 to 7:

The case of Barratt American, the Carlsbad developer of some 18,000 homes in Southern California over the course of nearly 30 years, was converted from a Chapter 11 bankruptcy into a Chapter 7 liquidation Thursday.

Update 2008-12-24: Barratt has filed Chapter 11 as of December 24. An article on the filing notes:

Barratt American and three sister companies, including its mortgage lending arm, sought protection from creditors with a Chapter 11 filing on Christmas Eve. It has a long list of creditors, mostly trade contractors; its top 20 unsecured creditors are owed more than $21 million.

The company has drastically scaled back operations in the past several months, slashing staff from about 140 employees to about 15. Company President Michael “Mick” Pattinson has been talking openly for a month about the possibility of bankruptcy as the company's troubles mounted.

Two days before Barratt sought protection, Bank of America foreclosed on seven of Barratt's current subdivisions or condo projects, claiming it was owed nearly $79 million. The bank is taking back four other projects in Riverside and San Bernardino counties.

Implosion 2008-11-21:

The San Diego Daily has reported that Barratt American's CEO is anticipating entering Chapter 11 bankruptcy protection by the end of the year. Per the article:

Barratt is a homebuilding firm that had 140 employees at its peak earlier in the decade, but is down to 15.

Barratt currently has about 1,300 lots stretching from San Diego to Los Angeles counties in the process of being foreclosed upon.

CEO Pattinson said he should be able to hold onto his interest in the 2,500-acre Fanita Ranch in Santee because it is under a separate agreement, but expects to lose most of what else he has.

Should anyone stumble on Barratt's official bankruptcy filing, please let us know!

Original Ailing listing - 2008-05-04

This builder is based in Carlsbad, CA, and has run out of money, as the story linked above details:

The housing recession appears to have damaged the financial standing of Barratt American, a private builder based in Carlsbad. More than 40 civil lawsuits, many from subcontractors suing over failure to pay, have been filed against the company in the last six months.

Barratt American cannot afford to pay off the subcontractors, which include drywall and concrete companies, because of a credit crunch that has left banks unwilling to make loans ---- especially to companies with significant exposure to the housing downturn, said Michael Pattinson, president and one of the company's owners.

The builder is searching overseas and amongst non-traditional sources to find financing. However, they may find even those sources now hesitant to lend, as most of the Western countries one would borrow from (especially the UK) are now embarking on their own housing downturns, and no hedge fund wants to be the "greater fool".

The article remarked that Barratt built & sold about 500 homes a year at peak, though when the downturn hit in 2007, it only sold 125. One can see why that would really leave them in a lurch. Assuming 375 homes in inventory at $300k a pop, that is $112 million of expected revenue that did not come in.