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Maronda Homes - Residential

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2011-04-20

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stories: timesonline.com, timesonline.com, pittsburghlive.com, bankruptcyhome.com, bizjournals.com, bloomberg.com

Leading right in with the first TimesOnline article:

The Pittsburgh area's third-largest homebuilder has filed for Chapter 11 bankruptcy protection while it seeks to refinance debt.

According to bankruptcy filings first reported by the Pittsburgh Tribune-Review on Tuesday, Maronda filed Chapter 11 after failing to secure revised financing with 14 lenders.

Maronda says in the documents it reached new terms with all of the lenders except Huntingdon National Bank, but that the others refused to sign off on the deal until all 14 lenders are on board.

Per PittsburghLive, the amount owed to the 14 banks totalled around $98 million (the entire credit facility is said to be $210 million -- BizJournals). Maronda is disputing the appraised value of the property serving as collateral on the loans (BizJournals) -- no indication yet on who is more likely accurate.

Given the above situation and that the builder is still decently cash-flowing, it appears this is very much a purely financial "implosion" than one threatening operations or presenting the prospect of liquidation.

Maronda lists assets of $500 million versus $100 million in liabilities. The Bloomberg article reports that Maronda also operates in Georgia, Kentucky and Florida.

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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.