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Harford County-based Gemcraft Homes Inc., one of the largest independent home builders in the mid-Atlantic, has filed for Chapter 11 bankruptcy protection.
Gemcraft, which once built more than 1,200 town houses and single family homes a year in Maryland and four other states, listed estimated debts of $50 million to $100 million in documents filed Monday in U.S. Bankruptcy Court in Baltimore.
New home builders have struggled amid the recession and mortgage crisis as sales have slowed and the inventory of homes and building lots has piled up.
William R. Luther Jr., Gemcraft's president, could not immediately be reached Wednesday.
The Forest Hill-based company said in its Chapter 11 filing it owes $8.1 million to the 30 creditors with the largest unsecured claims, among them Eighty-Four Lumber in Joppa, Bustamante Concrete in Abingdon and Dixie Construction in Churchville.
In Maryland, Gemcraft has new home communities in Harford, Cecil, Dorchester, Wicomico and Washington counties, according to the company's Web site. Gemcraft also builds homes in Delaware, Pennsylvania, Virginia and West Virginia.
Seven of Gemcraft's affiliated companies filed separate Chapter 11 petitions, including Gemcraft Homes Group Inc., Gemcraft Homes Forest Hill LLC, Gemcraft Chesapeake LLC, Harkins Property LLC, The Preserves at Jefferson Creek LLC, S&M Properties LLC and DLM LLC.
During the housing boom of 2005 and 2006, many home builders had expanded to meet a spike in demand. But in the aftermath of the credit crunch, builders have struggled as potential buyers lost financing and lenders reappraised builder-owned properties at lower values and accelerated loan payback provisions. Those home building companies with high debt loads have found themselves especially vulnerable to the big drops in market demand and property values.
Though the Baltimore area has largely avoided large-scale builder foreclosures, some lenders have foreclosed on builder-owned lots and homes. At least two local companies, Columbia-based Dale Thompson Builders and Altieri Homes, have gone out of business.
Builder Caruso Homes, based in Anne Arundel County, was forced into a bankruptcy in 2008 with debt of more than $100 million and hundreds of empty lots. But the company was able to successfully emerge from Chapter 11 this year after scaling back in size and working through the court to satisfy demands of multiple banks and creditors.
Gemcraft, which once built more than 1,200 town houses and single family homes a year in Maryland and four other states, listed estimated debts of $50 million to $100 million in documents filed Monday in U.S. Bankruptcy Court in Baltimore.
New home builders have struggled amid the recession and mortgage crisis as sales have slowed and the inventory of homes and building lots has piled up.
William R. Luther Jr., Gemcraft's president, could not immediately be reached Wednesday.
The Forest Hill-based company said in its Chapter 11 filing it owes $8.1 million to the 30 creditors with the largest unsecured claims, among them Eighty-Four Lumber in Joppa, Bustamante Concrete in Abingdon and Dixie Construction in Churchville.
In Maryland, Gemcraft has new home communities in Harford, Cecil, Dorchester, Wicomico and Washington counties, according to the company's Web site. Gemcraft also builds homes in Delaware, Pennsylvania, Virginia and West Virginia.
Seven of Gemcraft's affiliated companies filed separate Chapter 11 petitions, including Gemcraft Homes Group Inc., Gemcraft Homes Forest Hill LLC, Gemcraft Chesapeake LLC, Harkins Property LLC, The Preserves at Jefferson Creek LLC, S&M Properties LLC and DLM LLC.
During the housing boom of 2005 and 2006, many home builders had expanded to meet a spike in demand. But in the aftermath of the credit crunch, builders have struggled as potential buyers lost financing and lenders reappraised builder-owned properties at lower values and accelerated loan payback provisions. Those home building companies with high debt loads have found themselves especially vulnerable to the big drops in market demand and property values.
Though the Baltimore area has largely avoided large-scale builder foreclosures, some lenders have foreclosed on builder-owned lots and homes. At least two local companies, Columbia-based Dale Thompson Builders and Altieri Homes, have gone out of business.
Builder Caruso Homes, based in Anne Arundel County, was forced into a bankruptcy in 2008 with debt of more than $100 million and hundreds of empty lots. But the company was able to successfully emerge from Chapter 11 this year after scaling back in size and working through the court to satisfy demands of multiple banks and creditors.
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Nick Lowe
mehev (11/17/2009, 3:17 PM )