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Bridgeport Development - Oklahoma-area residential builder

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2008-10-14

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stories: newsok.com

A tipper has forwarded us the above story, about this regional builder shutting down operations. More key details:

Bridgeport Development and its three home-building divisions — Brookside Homes, LivingstonMeyer Homes and Newhaven Homes — have shut down operations. Jim Meyer, principal, said he is working with lenders, subcontractors and suppliers to sell homes Bridgeport has on the market.

Brass Brick Homes has cut staff, reorganized and is working with lenders to restructure its debt, said Ashley Christofferson-Cunningham, president.

"I’m not filing bankruptcy,” she said. "Are we in a cash-flow crunch along with everybody else? We’re in a cash-flow crunch and we’re working with the banks.”

Credit has dried up for construction subcontractors, with lenders no longer making loans based on accounts receivable, which gives the vendors no leeway in dealing with struggling builders, Christofferson-Cunningham said. That’s one reason for the number of mechanic’s liens filed against Brass Brick homes, she said.

... she said the biggest problem lies with Brass Brick, which got credit to build homes based on a 70-percent loan-to-value ratio when it should have been 80 to 90 percent. "That’s our fault,” she said, and the company is asking lenders to restructure its loans at the higher ratio, based on appraised value.

Leveraged financing is at a standstill, she said, and many builders in Oklahoma City are hurting.

...

Meyer said that by forming a new business structure, with both lenders and vendors having a stake, and selling Bridgeport’s remaining houses on the market, the company can avoid bankruptcy court.

Some very interesting details in that -- the mechanics of a housing downturn interacting (destructively) with a credit crunch.

Our source forwarded us the following vitals on Bridgeport (unconfirmed): Founded 1997 / Home Starts (all figures 2006) 120 / Sales Volume 27 Million / Employees 35 / Average home price $230,000.

That would rank them as a "tiny", though still significant builder.

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Comments:

disgruntled at 02:46 2008-10-17 said:
Brass Brick Homes didn't pay any of the subcontractors. All of the subcontractors are now filing liens on our property. No one is willing to do any warranty work. Our 1 year warranty is null and void now.

We have never heard from Brass Brick Homes. Do not buy a Brass Brick home. Do not work for Brass Brick (Ashley & Wiley Cunningham) Homes. Permalink

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Important: This company is on our list of builder operations that have "imploded" (see also ailing lenders). This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid declines in enterprise value; or abnormal "bail-out" by corporate parents or peers in order to continue to operate. The builders may be residential or commercial.