Longtime Orleans Homebuilders CEO Jeffrey P. Orleans is leaving the company founded by his grandfather.

A bankruptcy judge approved Monday a separation and settlement agreement negotiated with Orleans as the company has been working its way out of bankruptcy. Under the agreement, Orleans agreed to resign his position as chairman of the board, chief executive officer, and president in return for a $700,000 lump sum payment.

Jeffrey Orleans has worked for the company his grandfather founded for more than 40 years. He's been a director since 1983 and served on the board and as CEO since 1986. He became president in the fall of 2009.

Orleans is expected to announce the appointment of a new CEO soon.

The company is hoping to be out of bankruptcy as an operatng home builder by the end of the year. The court is scheduled to make a decision on its reorganization plan on Nov. 16.

If the plan is approved, the company would emerge with less than $200 million in debt, down from more than $500 million at the time of the filing on March 1.

Under the proposed plan three debt holders, who collectively hold roughly 85% of its debt, will hold a controlling interest in the company. These "plan sponsors" are Strategic Value Partners, Anchorage Illiquid Opportunities Offshore Master, and Bank of America's distressed debt desk.

It was these three creditors who opted to support the reorganization of the 90-year-old company rather than see it liquidated through a sale of its assets to the highest bidder. NVR had launched a starting bid of $170 million for all the company's assets. NVR is now suing.