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EnCap Golf Holdings - Developer / Home builder

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2008-05-09

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stories: nj.com

EnCap Golf Holdings a New Jersey company that was set to build "thousands of homes" and golf courses above entombed landfills filed for Chapter 11 bankruptcy protection. The filing came a day after the Meadowlands Commission, a New Jersey regulatory agency, determined to sever ties with EnCap. Per NJ.com:

The company was supposed to clean up landfills and build a golf course, hotel and 2,600 homes in Rutherford and Lyndhurst, but the project got bogged down in cost overruns, delays and environmental violations.

It was not clear yesterday whether taxpayer money would be lost as a result of EnCap's filing.

The state Department of Environmental Protection arranged $215 million in loans for EnCap. About $51 million was not backed by repayment guarantees.

Also, the Bergen County Improvement Authority arranged $103 million in loans. A spokesman for the authority said a group of banks led by Wachovia guaranteed the funds, so taxpayers are not at risk.

The article goes on to note that EnCap lists liabilities/assetse in a range between $100 to $500 million.

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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.