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Neumann Homes - Residential Home Builder

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2007-11-01

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stories: dailyherald.com, chicagotribune.com, chicagotribune.com

On November 1, 2007, Neumann Homes filed for Chapter 11 bankruptcy protection. In the Chapter 11 petition Neumann, said has assets and debt of more than $100 million each, with as many as 5,000 creditors.

Neumann lost $60 million in the past two years which the company blamed on "inadequate funding and drops in building of 50 percent to 80 percent in Chicago, Denver and Detroit, its three largest markets".

By seeking chapter 11 Neumann leaves many people in a lurch. For example, One woman, Lynn Michelau, discovered a lein on her home, for an 8-thousand dollar drywall bill that Neumann didn't pay. In all Neumann's creditors are seeking $286.9 million.

Neumann has said it stands ready to pay refunds and have Homes finished " Company CEO Kenneth Neumann said in an interview that within days he expects permission to return about $875,000 in earnest money to about 120 customers for homes that hadn't broken ground at the time of the bankruptcy filing on Nov. 1."

Neumann had 130 employees when it entered bankruptcy, 110 of whom were immediately dismissed.

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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.