Dunmore Homes, Inc. - Residential

Update 2008-03-07:

More on the Dunmore Homes family-ties debacle, from the NY Times.

From Sacbee.com comes an update on Dunmore Homes bankruptcy/liquidation:

Bankrupt Granite Bay home builder Dunmore Homes appears headed for the scrapheap after more than a half century of building homes in the Sacramento area.

The firm's lawyers say Dunmore "is currently winding down its business and liquidating its assets." The statement stands in contrast to others last year that the builder hoped to emerge intact from its financial struggle and eventually resume building.

Sacremento-based Dunmore Homes, Inc., a multi-million dollar family-run home builder originally established in 1954, was sold for a mere $500 to Comstock Mortgage senior loan officer Michael Kane. A month after the completion of the sale on September 10, 2007, Dunmore Homes under Kane's ownership filed for Chapter 11 bankruptcy protection (Nov. 7). It's all a bit confusing, so please reread (And also refer to the helpful timeline below).

The Sacremento Business Journal reports:

After two years of declining sales, all of Dunmore Homes' assets were sold two months ago to Michael Kane, a senior loan officer with Comstock Mortgage who also has experience in land acquisition and development with Warren Moore Development.

In exchange for $500, Kane picked up a company with assets worth $280 million and liabilities of $250 million, Dunmore Homes said in court documents. Kane also received a $250,000 payment from former president Sidney B. Dunmore and the promise of a loan, according to court documents.

With assets that outweigh liabilities, the company appears solvent on paper. But it's extremely low on cash. The builder had just $119,000 on hand at the end of September.

The Journal goes on to report that one of the major creditors of Dunmore Homes, RBC Centura, filed suit on November 7^th, which was subsequent to the sale but prior to the bankruptcy filing. RBC Centura alleged "that the sale of all the assets for a mere $500 wasn't adequate and was done to 'hinder, delay and defraud the creditors,' including RBC. The bank also alleges that Dunmore Homes and Kane 'lack sufficient expertise and funds to carry on the business.'"

Having reported revenues of approximately a quarter billion dollars in 2004, Dunmore Homes had assets totaling approximately $280 million at the time of the sale to Kane. Dunmore owes a "combined total of $196 million on Dunmore Homes' 26 new-home communities."

The Sacremento Business Journal article included the following helpful timeline of the events at Dunmore Homes:

Aug. 2: Dunmore Homes lender RBC Centura Bank alleges builder is in default on loans for four new-home projects worth tens of millions.

Aug. 8: Dunmore Homes says it has stopped construction on all its projects. Sales offices later close.

Sept. 10: President Sidney B. Dunmore dissolves Dunmore Homes Inc., a California corporation, and changes its name to DHI; he sells all assets of the corporation to Comstock Mortgage loan officer Michael Kane for $500. The new Dunmore Homes Inc. is incorporated in New York state.

Sept. 30: The company has 37 employees, down from 132 a year earlier, and cash is down to $119,000. At its peak in 2004, the company had $250 million in gross sales, closing 776 home sales.

Nov. 7: RBC files suit in Fresno County Superior Court against Dunmore Homes, Kane and Sidney B. Dunmore, alleging the sale to Kane was fraudulent.

Nov. 8: Dunmore Homes Inc. files for bankruptcy reorganization in New York City, claiming assets of $280 million and debts of $250 million.

We are unsure at this time whether Dunmore Homes will emerge from bankruptcy to build again. If you have any further information, please let us know.