Homebuilder’s Bankruptcy Leaves Empty Lots in Riverside County

From the North County Times online:

“The bankruptcy of a major regional homebuilder has left two large tracts in Southwest Riverside County with hundreds of empty lots, prompted a lender to foreclose on one and a homeowners association to demand $2 million in compensation.

John Laing Homes, of Irvine, built a links-style golf course near Lake Elsinore’s baseball stadium and said as recently as March 2008 that it planned 1,500 homes at the neighboring Summerly development. Laing also built several dozen houses at the Holiday senior community in Menifee, with plans to extend the development to nearly 200 homes.

But construction has remained stalled amid weak real estate markets.

The builder filed a Chapter 11 bankruptcy petition in February, seeking temporary relief from debt estimated between $500 million and $1 billion. The Delaware judge handling the case ordered the company liquidated in early June after concluding that the company lacked the assets to cover that debt and re-emerge successfully, according to court records. Messages left with the trustee were not returned.

A lender appears to be foreclosing on parts of the Summerly development. Lawns at a half-dozen model homes are overgrown with weeds, and notices recently posted on the houses indicate a foreclosure auction is scheduled in mid-July, a neighbor said.

Residents of the Holiday development and the 4S Ranch development in San Diego’s Ranch Bernardo neighborhood have filed claims against the builder’s bankruptcy estate.”

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Bankruptcy Protection for Eddie Bauer Holdings, Inc.

From CNN online:

“Eddie Bauer Holdings Inc. filed for Chapter 11 bankruptcy protection Wednesday, citing an inability to pay back debt.

Eddie Bauer (EBHI) emerged from Chapter 11 bankruptcy in 2005 after being spun off from former owner Spiegel Catalog, which itself sought bankruptcy protection in 2003.

Costs from the 2005 reorganization, combined with pressure from the current recession, left the company ‘with no choice but to use this process to reduce the debt load,/ said chief executive Neil Fiske in a prepared statement.’”

Eddie Bauer has 371 stores nationwide.  In San Bernardino County, there is an Eddie Bauer store in Rancho Cucamonga at Victoria Gardens.  In Riverside County, the Dos Lagos Center in Corona also has an Eddie Bauer store.  It seems that no closings are imminent, but if a new buyer takes over, however, it’s unclear what effect that would have on store closings.

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Chapter 7 Bankruptcy Filings in Inland Empire, May 2009

For bankruptcy attorneys in Riverside and San Bernardino counties, there was no shortage of Chapter 7 bankruptcies to be filed in May, 2009.

The ten cities with the most Chapter 7 bankruptcy filings in the Inland Empire for the month of May 2009 were: Corona, Fontana, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville. Other Inland Empire cities that also had a high number include: Hesperia, Perris, and Rialto.

Chapter 11 Bankruptcy Filed By GM

Attention, Riverside and San Bernardino counties, your favorite GM dealership might not be around in a few months. Today, GM filed for Chapter 11 bankruptcy, and is expected to close a number of dealerships over the course of its restructuring, which is estimated to take 2-3 months. GM dealerships in the Inland Empire include those in the cities of: Corona, Hemet, Moreno Valley, Redlands, Riverside, San Bernardino, and Victorville.

From the Los Angeles Times online:

President Obama said that pushing General Motors Corp. into bankruptcy today was a painful but necessary step to revive the legendary automaker, saving thousands of jobs and avoiding another direct hit to the struggling economy.

“‘Working with my auto task force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,’ Obama said at the White House just hours after the company filed for bankruptcy protection this morning in a Manhattan courtroom…

‘We are acting as reluctant shareholders because that is the only way to help GM to succeed,’ he said. ‘What we are not doing, what I have no interest in doing, is run GM.’”

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Bankruptcy Bill DEFEATED in Senate, 51-45

The bankruptcy “cramdown” legislation that the Obama administration hoped would be a key part of its foreclosure prevention plan was defeated in the Senate on Thursday.  Bankruptcy attorneys in Riverside and San Bernardino County had hoped that this bill would pass and provide relief for their bankruptcy clients, especially those underwater on their homes, but will now have to wait indefinitely for legislative help.

From CNN online:

“The Obama administration lost a bid to add a powerful weapon in its fight against foreclosure Thursday, after the Senate voted down a proposal to allow bankruptcy judges to modify mortgages.

The defeat left many housing advocates questioning the effectiveness of the president’s loan modification plan. The so-called cramdown provision, which would allow judges to reduce mortgage principal, would have put pressure on servicers to modify loans before borrowers file for bankruptcy.

The financial industry lobbied hard against the bill, arguing that letting judges change mortgage contracts would add instability to the market and raise interest rates. Senate Republicans and some moderate Democrats were concerned about the bill’s impact and about the growing resentment among homeowners in good standing.

The bill was defeated by a 51-45 vote. The House had passed similar legislation last month.”

Bankruptcy Cramdown Bill Facing Defeat in Senate Today

The much anticipated legislation allowing bankruptcy judges to modify mortgages looks like it is fated not to pass the Senate.  Riverside County bankruptcy attorneys and San Bernardino bankruptcy attorneys, along with many Inland Empire residents facing foreclosure, were hoping for some relief from Congress.  A different consumer-related bill, relating to credit card regulation, looks like it will pass, however.

From Yahoo news:

“Two consumer-oriented pieces of legislation opposed by the financial services industry appear to be headed for radically different fates in Congress.

A credit card reform bill with enhanced consumer protections is progressing fairly smoothly, while a so-called cramdown bill-which would let homeowners use bankruptcy court as a an alternative to the foreclosure process-appears unlikely to become law, according to business and Congressional sources.

The difference may be as simple as the level of pubic support from the White House at a time when relations between the administration and the financial services industry are deteriorating amid tension over TARP money, bank stress tests and executive pay.

‘There will be a credit card bill,’ predicts one well-placed industry source. ‘It makes sense. Everybody in America understands the issue. If you had to pick a legislative fight, with this you win.’

‘The cramdown is a much tougher one to do, which is part of what is going into the thinking,” says veteran banking analyst Bert Ely of Ely & Co. “There’s a lot of people who don’t have a mortgage. Credit cards are more of a populist issue.’”

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Riverside County Bankruptcy for Valley Health System

Bankruptcy looks like it has struck another organization in Riverside County, this time in the health care industry.

Members of the Valley Health System board of directors on Monday tried to assure employees and constituents that the district is headed in the right direction, despite losses of nearly $3 million since the end of last year.

The board met for its first meeting since the health care district, which includes two hospitals, announced the reassignment of Hugh King, its chief financial officer and administrator at Hemet Valley Medical Center.

The district’s other hospital is Menifee Valley Medical Center.

King’s departure comes as the health care district, which declared bankruptcy in December 2007, fails to meet financial projections, according to records.

The district was projected to earn almost $2.1 million between December and February.

Bankruptcy Bill Stalled in Senate, Negotiations Underway

It seems that the Bankruptcy Bill that passed in the House, is now stalled in the Senate…

From Curtis Law Group’s news section:

“Congressional Democrats in the Senate are trying to pass a bankruptcy bill, coined as a “cramdown” bill by opponents of the legislation, which aims to help stem the tide of foreclosures by giving bankruptcy judges the discretion to modify mortgages for homeowners who otherwise cannot afford their homes.

The House of Representatives have already passed a version of this bill, but Republicans are holding it up in the Senate. The Senate has decided to put off the vote until later in April, while changes to the bill are negotiated.”

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New Audit Tool To Help Bankruptcy Judges, Trustees

It seems that allowing bankruptcy judges to modify mortgages is leading to entrepreneurial ventures by firms seeing the new change as an opportunity, if this California’s auditing company’s new product is any indiacation.  From Yahoo news:

“A specialist in providing forensic loan audits for attorneys and financial institutions has developed a new product designed for bankruptcy attorneys, judges and trustees, who will soon be operating under a law allowing judges to restructure residential mortgages in bankruptcy proceedings.

Industry analysts predict that the pending legislation, which has passed the House and is expected to win Senate approval, will produce a surge in bankruptcy filings, as financially-pressed borrowers seek bankruptcy protection in an effort to avoid foreclosure…

Audit reports can consist of approximately 100+ pages of information. In order to expedite the review process, a concise, two-page summary of the audit will highlight all relevant information about the transaction and the parties involved in it.”

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Riverside RV Company Files for Chapter 11 Bankruptcy

A Riverside RV company, well known for years as a giant in the industry, has fallen victim to the economic crisis and the company’s bankruptcy attorney has filed for Chapter 11 bankruptcy on its behalf.

“Fleetwood Enterprises Inc., the iconic Riverside-based maker of recreational vehicles and manufactured housing that has ferried road-trippers and housed owners for 59 years, has filed for Chapter 11 bankruptcy.

The company announced Tuesday morning that it would keep day-to-day operations of its businesses going while it shops for a buyer.

Its travel trailer division though will be shuttered, affecting 667 employees nationwide including 12 at the company’s Rialto service center.

The company laid off another 65 Inland workers in corporate positions Monday. More than 600 workers remain in Riverside.”