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Mayer-Luce Development - Developer, home builder

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2008-06-11

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stories: pe.com

Desert Hot Springs, California-based Mayer-Luce Development has filed for Chapter 7 bankruptcy protection according to this article from The Press-Enterprise. Mayer-Luce was owned by Robert Mayer and Walter Luce, who are seeking the bankruptcy protection. Per the article:

In court filings, Mayer said he had $2 million in assets and $86.4 million in debts. Of his $5,616.66 monthly income, $3,000 is from a family trust. His father, H.M. Mayer, founder of the Oscar Mayer bologna empire, died in April 2007.

Luce reported personal assets of $708,278 and $85.4 million in debts.

The duo's three business entities based in Desert Hot Springs -- Mayer-Luce Development Group Inc., Mayer-Luce Builders Inc. and LTV Builders Inc. -- also filed for liquidation.

One entity claims no assets or debts. Another claims $2,022 in assets and $20,000 in debts. LTV Builders Inc. reportedly has $8.7 million in assets consisting of eight residential lots in Oakland and $10.1 million in debts.

Apparently, Mayer-Luce had promised to build a golf course before the property fell to foreclosure. The course was to be a part of a billion dollar project replete with a "high end hotel". These plans are now shot, and some homeowners are suing Mayer-Luce for "shoddy construction". Randomly, Robert Mayer's father founded the Oscar Mayer bologna brand.

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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.