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Reynen & Bardis Communities Inc. - Home Builder

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2008-04-23

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stories: sacbee.com, bizjournals.com

Update 2008-10-15

Apparently, Christo Bardis has followed his partner Reynan and filed for personal bankruptcy protection.

Original posting 2008-04-23

John Reynen, co-founder of 35-year-old, Sacramento-based home builder Reynen & Bardis Communities Inc. filed for personal bankruptcy protection after Bank of the West took steps to recover his personal assets. The Sacramento Business Journal reports:

Reynen had personally guaranteed money lent to the development and home-building company he founded with Christo Bardis and secured those loans with his personal property. Bank of the West had been pursuing recovery of those personal assets. A window that would allow a bankruptcy court to set aside attachments on that property -- presumably for the benefit of all the company's creditors -- was set to expire Thursday.

The article goes on to note that, "The company, which has been pounded by the housing downturn, said it will be 'unaffected' by the filing."

Given that at least one bank is taking steps to be made whole on company debt guaranteed by John Reynen, the ability of Reynen & Bardis Communities Inc. has been brought into question. Indeed, the SBJ article notes that, "[the company is] clearly dependent on the cooperation and goodwill' of creditors to restructure loan agreements."

Such dependence coupled with Reynen's personal steps to seek bankruptcy protection make for a sufficient basis for implosion.

At peak, Reynen & Bardis Communities was one of the 100 largest builders in the country and completed over 700 homes in 2005 (See here). If you have any updates on John Reynen's bankruptcy proceedings or can elaborate upon Reynen & Bardis Communities' ongoing credit negotiations and/or status, please let us know.

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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.