November 6, 2008 - Village Homes of Colorado, Denver CO

Village Homes of Colorado Inc., one of metro Denver’s largest homebuilders filed Chapter 11 bankruptcy reorganization on Nov. 6, according to U.S. Bankruptcy Court documents.

The builder said it filed for bankruptcy protection because of the soft local housing market and debt crisis, listing $103.9 million in assets and $138.4 million in liabilities, according to the filing.

Of those liabilities, $130.9 million is owed to creditors with secured claims, $6.6 million is owed to unsecured creditors with non-priority claims and $857,887 to unsecured creditors with priority claims.

The homebuilder emphasized it will continue to operate.

“We are using the Chapter 11 process as a tool that enables us to continue normal operations while we restructure our capital,” Cheryl Schuette, president and COO, said in a Nov. 10 statement. “Our goal is to emerge from the process as a stronger, healthier and more efficient company that will be newly positioned for success.”

Schuette attributed Village Homes’ decision to file bankruptcy to the “current realities of the housing market,” including the troubled credit industry, expanding home inventories, rising foreclosure rates, downward trends in home and land prices, as well as reduced customer confidence.

Village Homes’ largest secured creditors include Guaranty Bank ($85.9 million) GMAC/Residential Capital LLC ($36.2 million), and Compass Bank ($4.39 million).

Biggest unsecured claims are held by companies such as Creative Touch Interiors of Aurora ($445,636), Coloco Inc. of Louisville ($353,124), ProBuild/Home Lumber of Littleton ($325,500), Masco Builder Cabinet Group of Detroit ($276,218) and Majestic Restoration Services Inc. of Castle Rock ($184,201).

At the time of the Chapter 11 filing, the company had $2 million in funds on deposit.

Started in 1984, Village Homes has built roughly 10,000 homes, according to the filing. The company averaged $200 million a year in revenue over the last five years.

Matt Osborn, Village Homes’ senior vice president of homebuilding and director, is president of the Home Builders Association of Metro Denver for 2008.

Recent executive salaries at the company ranged from $288,000 a year for Chairman and CEO John Osborn and $216,000 for President/COO Schuette to $150,000 for Matt Osborn (plus a $9,000 car allowance), according to bankruptcy documents.

Original story - DenverBizJournal.com