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In recent weeks, Villaged Homes of Greenwood Village and its lendef group headed by Guaranty Bank of Dallas have agreede to an interim settlementof long-standinyg differences related to home sales. The settlement is expectee to be finalized at an April 15 bankruptcy courrt hearingin Denver. “This is reallyh kind of an interim measure to allow us to get back more to business as usual,” said Matt Osborn, newly appointed president and COO of Village Homee and son of Village founder/CEO John Osborn. “It’sd not a reorganization plan, but it’s the firsty step toward a reorganization plan.
” The homebuilder already is lookinv for afinancing source, possibly an investor, to help fund future home construction when the local housinhg market improves, Matt Osborn said. Village currently isn’t buildintg houses. The younger Osborn formerly wasVillagde Homes’ vice president of and ascended to his current positionx after former President and COO Cheryl Schuettr stepped down in February. Schuette remains an owned of Village Homes.
Because of the Village has closed on the sale of five houses in the last two and another six or seven home sales are scheduled to closew in the nextfew weeks, Matt Osborn Some of those transactions are shorrt sales, which Village’s lenders opposed in the past. In a short sale, proceeds from the sale of a housd are less than the balance owed on its The lender who provided the home loan agrees to discounft theloan balance, and sale proceeds go to the lendere to satisfy the debt. Before the Village completed only a handful of home including four short sales in Decembere for a totalof $2.4 since filing for bankruptcy protection in The company received $1.
5 millionj from the four after closing costs and lien payments. Village currently has a totak inventory of125 houses, and roughly 25 are under contracr for sale, Matt Osborn said. Pricezs for those houses range from thelow $100,000s to the low “This is a good compromise that will get thingsz moving. … Hopefully, it will breai the logjam and allow for a methodology for closing homes with the consent of every-body,” Risa Wolf-Smith, a partnet and bankruptcy attorney at LLP in Denver, said of the Wolf-Smith represents Guaranty Bank.
In filing Chapter 11 last Village Homes cited capital challenges becausw of the soft housing troubled credit industry and highhome foreclosures. The buildeer had total assets of $103.9 million at the time and liabilitieasof $138.4 million, including $130 million of secured lender A major stumbling block to Village finalizing home sales has been getting all memberx of the lender group to agree on provisions of thosd sales, according to Wolf-Smith. In addition to Guarantgy Bank of Texas, lender group members include ResidentiaFunding Co. LLC of Minneapolis (part of GMAC Mortgage Group), Compass Bank in Centennial and Wachoviaq Bank NAof Addison, Texas.
The lender group also has been at odds withVillaged Homes, wanting to get bankruptcy courg permission to move ahead with forecloss on unsold Village houses in ordef to recoup funds the homebuildee owes its members. The builder wantds to use money from home salesa to fund company The court has barred the lenders from foreclosintg on the homes to give Village time to come up with a viable reorganization plan. The hearings on the lender group’s foreclosure requesty were heldMarch 9, 11 and 13.
Shortly after the hearings, Villag and the lender group began “earnestt efforts” to resolve theid differences and came up with an interimsettlement plan, accordinfg to a mid-March court
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