DeLuca Enterprises - NJ tri-state homebuilder

A reader drew our attention today (2011-09-27) to the story of DeLuca, which had escaped our notice last year. The property subsidiary of the builder, DeLuca Homes, was unable to pay at least one of its sizeable bank loans, and had to move forward to liquidate under receivership. We are considering this an "implode" because clearly the property subsidiary was where the bulk of DeLuca's assets were. Of course, because they skillfully separated the builder from the portfolio, they appear to be able to continue operating without a hitch (the builder's home page is here).

More on the circumstances of the receivership from the article above:

This situation comes after Wells Fargo Bank filed in April a lawsuit against DeLuca in connection with $119 million the developer borrowed from the bank and a consortium of eight other financial institutions, according to court documents. The loans were secured by residential developments in Pennsylvania, New Jersey and Florida. As part of the lawsuit, Wells Fargo wanted an unbiased party — the receiver — to control and sell off the real estate in order to recoup some funds owed to it.

...

Beginning in the fall of 2008, DeLuca Enterprises and its lenders began discussing the company’s “inability to comply with the payment terms,” court documents said. The negotiations continued and by June 2009, Wells Fargo and DeLuca Enterprises entered into a forbearance agreement requiring the homebuilder to pay the $119 million by the end of last December. DeLuca Enterprises never paid up. The builder began to sell the lots and hired a broker to market the properties as a way to generate cash to pay off the loan, according to a company spokesman.

The article also has some background on DeLuca:

DeLuca Enterprises, a privately held company in Yardley, has been in business for more than 43 years and had grown to become one of the top 150 largest builders in the country. It joins other local residential developers suffering from the housing downturn and recession.