Pushed by its creditors who filed a petition to force it into bankruptcy, Woodside Homes agreed Wednesday Aug. 27, to enter into bankruptcy by Sept 16.
"We are consenting to agree that by Sept. 16 we will file for voluntary Chapter 11," confirmed Jennifer Mercer, a spokesperson for the builder, one of the top-10 private builders in the United States.
In the meantime, a judge for the U.S. Bankruptcy Court for the central district of California gave the company permission to continue its home building business as usual, using its cash on hand to continue paying employees, vendors, and subcontractors to sell and build homes.
"Both the company and the noteholders and the secure lenders want to ensure as little disruption to our subcontractors, to our vendors as possible," said Mercer, who was hired as spokesperson for the publicity-shy company in the wake of the bankruptcy filing.
What the company won't be doing under the court-prompted agreement with its lenders is selling off any of its big assets or buying any new land. It will be providing its creditors with accounting of its financial activities.
On Aug. 20 ,five insurance companies--holders of more than $475 million of Woodside's notes--filed the petition, asking the court to push the builder into bankruptcy court so they could collect their debts. Two days later, JPMorgan Chase Bank, as agent for itself and 14 other bank lenders of $330 million to the home builder, joined the petition.
Founded in 1977, Woodside has a wide footprint, building in high-growth states as well as more stable markets. According to its website, the Utah-based company builds in Arizona, California, Colorado, Florida, Maryland, Minnesota, Nevada, Texas, Utah, and Virginia.
It also has exposure in some giant ailing joint ventures in the Las Vegas area, Inspirada and Kyle Canyon, both Focus Property developments with consortiums of big builder partners. It also is active in Las Vegas Lakes.
Mercer said Woodside's joint ventures are not included in the bankruptcy filings.
Woodside was ranked No. 7 in revenue with $1 billion in sales during 2007 on the Builder 100 top private builder list. With 2,703 closings, the company was ranked No. 8 in unit sales.