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Caruso Homes - upscale residential builder

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2008-06-24

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stories: baltimoresun.com

Caruso Homes, MD/DC/VA-based builder of upscale homes, has entered chapter 11 bankruptcy. The credit crunch and housing bear market are blamed, unsurprisingly. A Baltimore Sun article has details:

New home sales for the first quarter of 2008 dropped 13 percent from the fourth quarter and have plummeted 33 percent from the first quarter of 2007.

Caruso's 30 largest consolidated unsecured creditors are owed $2.3 million. The biggest claim, more than $450,000, is held by 84 Lumber.

...

The company listed debt of more than $100 million and assets of less than $100 million in Chapter 11 documents filed Monday in U.S. Bankruptcy Court in Baltimore. About 24 affiliates also sought court protection.

As for the scale of the company, the article gives at least $100 million in annual revenues as a recent figure.

Caruso plans to keep operating through and after restructuring.

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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.