Las Vegas builder Rhodes Homes has gone the way of some of its local competitors in a market plagued by foreclosures and flooded with inventory; the company filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court, District of Nevada, on March 31.
In a prepared statement, James Rhodes, president of the company, said failure to make payments on the company's principal and interest on a key loan led to the filing.
"During the past several weeks, Rhodes Design and Development had been actively engaged in discussions with Credit Suisse and the lender consortium about an out-of-court resolution to the company's financial position," he said in the release.
In the filing, the company assets of between $10 million and $50 million and liability of between $100 million and $500 million. Thirty-two affiliates of Rhodes Homes also fall under the March 31 bankruptcy filing.
Rhodes said the filing will have little effect on the day-to-day operations of the company; it will continue to deliver homes as well as take new orders.
To help the company during its restructuring, the company has retained the services of Pachulski, Stang, Ziehl and Jones to guide it through the bankruptcy process. Management also stated that it may seek debtor-in-possession financing.
Rhodes Homes has built more than 7,000 homes in Southern Nevada since it was founded in 1985. The company's major projects include the two master planned communities of Rhodes Ranch and Tuscany Residential Village--which were used as collateral for a $500 million credit facility in 2005.
Learn more about markets featured in this article: Las Vegas, NV.