Innovative Communities - California developer

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2008-11-21

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stories: yahoo.com

Innovative Communities, a California developer, is expected to file for Chapter 7 liquidation by December 31.

According to the article:

Tom Dobron, Innovative Communities founder and CEO, said he was aware as early as 2004 that a housing market collapse was on the way. He said he owned about 8,000 lots in 20 communities around the Southwest at that time, and sold about 2,500 of those at what he said were some handsome prices for the most part, at least until the beginning of last year. Innovative retains about 5,500 lots, but with the liquidation coming next month, it won't have them for long.

...

Dobron, who founded the company 11 years ago, and has spent the past 35 years in the homebuilding business, said his problems happened after City National Bank reportedly declined to renegotiate a $15 million loan when it was due at the end of last year.

The winddown of Innovative Communities has resulted in numerous lawsuits and recent layoffs of some 85 employees.

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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.