March 31, 2009 - Jim Rhodes - Rhodes Design and Development Corp, Las Vegas NV
Las Vegas developer Jim Rhodes files for bankruptcy
Rhodes has been one of Las Vegas’ most successful and controversial developers and home builders.
Full Story - Below
Las Vegas developer Jim Rhodes files for bankruptcy
Developer James Rhodes tonight filed a petition for bankruptcy on behalf of many of his key businesses, including Rhodes Design and Development Corp., listing $100 million to $500 million in assets and liabilities in the same range.
The developer filed for bankruptcy under Chapter 11, which allows the companies to continue operating while their finances are restructured.
Rhodes has been one of Las Vegas’ most successful and controversial developers and home builders. He developed Rhodes Ranch in southwest Las Vegas and Tuscany Village in Henderson. He provoked the ire of environmentalists with his development of the Red Rock County Club community near the recreation area of the same name.
Rhodes drew news coverage again when Erin Kenny, the former Clark County commissioner, disclosed that Rhodes paid her $200,000 a year for consulting after she pleaded guilty to federal corruption charges. Kenny was sentenced to 30 months in prison in connection with the bribery case.
The Arizona Corporation Commission questioned Rhodes about his business relationship with Kenny when he sought to establish a water utility for a master planned community proposed in Golden Valley between Kingman and Bullhead City.
The Arizona panel also grilled Rhodes over $148,000 in fines he paid after admitting he illegally funneled campaign contributions in 2002 through employees and employees’ spouses to Sen. Harry Reid, D-Nev., and then County Commissioner Dario Herrera. Herrera also was convicted in connection with the bribery case.
The Rhodes Companies filed the bankruptcy petition but an attachment notes that 31 affiliated companies also are seeking protection under Chapter 11 bankruptcy.
They include Rhodes Ranch General Partnership, Rhodes Ranch Golf and Country Club, Tuscany Golf Country Club, Tuscany Acquisitions and three similarly named companies, Rhodes Realty, Rhodes Homes Arizona, Rhodes Arizona Properties, Tribes Holdings, Six Feathers Holdings and Bravo. Rhodes filed a statement explaining that he believed “it is in the best interests of the company, its creditors” and others to file for Chapter 11.
The Sunstate Companies of Las Vegas is the largest unsecured creditor and is owed $201,000, followed by G.C. Wallace of Las Vegas which is owed about the same amount. The developer estimated that between 5,000 and 10,000 creditors will have claims in the bankruptcy case.
He hired the law firm of Pachulski Stang Ziehl & Jones which has offices in Los Angeles and other cities, but the petition was filed by Larson & Stephens of Las Vegas.
Additional Story - April 1, 2009
A well-known southern Nevada development firm has filed for bankruptcy protection, citing dropping land values and dramatically reduced home sales.
Rhodes Design and Development Corp. listed $100 million to $500 million in both assets and liabilities in the Chapter 11 filing submitted late Tuesday in U.S. Bankruptcy Court in Las Vegas.
"The economic crisis affecting Las Vegas, along with the inability to secure alternative and cost-effective financing, has hurt homebuilders," company founder and chief Jim Rhodes said in a statement issued Wednesday.
"We are hopeful that this financial reorganization will produce successful results for residents and owners of homes built by Rhodes Homes," he said.
The filing listed 32 corporate debtors, including several construction entities, and property in Las Vegas, Henderson and Arizona. It estimated that between 5,000 and 10,000 creditors would have claims.
The statement said the company missed a crucial March 31 loan payment, but said it expects to deliver all homes currently on order and would continue to take new orders.
"Land values and home values have plummeted and ... new home sales have fallen dramatically," the statement said.
Rhodes is one of southern Nevada's best-known and most controversial home builders.
He founded Rhodes Design and Development in 1988, and built Rhodes Ranch in southwest Las Vegas and Tuscany Village in Henderson. He drew opposition Advertisement Click Here Quantcast from environmentalists when he built the Red Rock County Club not far from the Red Rock National Conservation Area west of Las Vegas.
Rhodes agreed to pay $148,000 to the Federal Election Commission in 2006 to settle a complaint that he violated federal contribution limits by reimbursing employees for contributions they gave to the 2002 campaigns of U.S. Sen. Harry Reid and Dario Herrera, one-time Democratic congressional candidate.
Two Rhodes Design and Development executives were also fined $5,500 for soliciting and collecting the contributions. Rhodes, a Republican, is a generous contributor to Nevada politicians.
The FEC said Reid and Herrera, both Democrats, were not aware of the campaign contribution scheme at the time.
Rhodes' name also surfaced in a federal corruption scandal when a convicted former Clark County commissioner, Erin Kenny, testified in June 2007 that Rhodes paid her $201,600 a year as a consultant after she pleaded guilty in 2003 to federal bribery charges.
Arizona utility regulators questioned Rhodes in 2007 about his relationship with Kenny after Rhodes applied for permits to operate water and sewer companies to serve more than 50,000 homes he wants to build in a rural part of Mohave County.