Steve Wall is back in the game.
The former president and CEO of Wall Homes, which went bankrupt on Jan. 17, is building and selling homes again under a new name Endeavor Wall Homes, which is based in Arlington, Texas. (Endeavor was the business name under which the corporation Wall Homes had done business before it went under.)
Wall became equity partner and CEO of the new venture shortly after he resigned from Wall Homes on May 14. (Wall could not be reached for comment at press time.) His re-entry into the home building arena will initially revolve around the Wall Homes’ assets he reacquired through an auction that the U.S. Bankruptcy Court for the Northern District of Texas authorized on June 22. According to court documents, Endeavor made a cash bid of $4,043,000 for 217 lots in more than a dozen different subdivisions in Texas, including those located in San Antonio, Plano, DeSoto, and Waxahachie. Endeavor also bid $3,221,652 for 18 finished homes in nine subdivisions.
Frost National Bank, one of Wall Homes’ lenders, owned that land and those homes. When Wall Homes filed for protection from creditors under Chapter 11, the builder owed Frost $10,794,750. The bank had also provided Wall with new financing after it filed.
Endeavor will pay the full taxes owed on the lots and houses for 2009, plus around $100,000 for past-due taxes on these properties. However, it bought these properties free and clear of all prior liens, claims, or encumbrances. These transactions stipulate that if Endeavor sells some of the lots to competitor Grand Homes (which was another bidder), it would pay Frost National 25% of the profit from those sales.
The Court approved the liquidation and auction of Wall Homes’ assets on May 21, at which time the builder owned approximately 976 lots and 114 completed but unsold homes as well as undeveloped land. The Dallas Morning News reported that D.R. Horton paid over $4 million to acquire some of these lots, and that the auction generated $14 million, even as Wall Homes abandoned lots in Dallas, Fort Worth, and Houston that had been recaptured by different lenders and valued at $3.5 million.
Conroe, Texas-based LGI Homes agreed to buy 210 lots within unfinished Wall Homes' developments near Fort Worth. This particular deal is unique because Sovereign Bank, another Wall Homes lender, sold the lots and also financed LGI’s purchase of them. “We’re able to pay Sovereign a price that’s palatable for them, and we still make our margins,” Eric Lipar, LGI’s CEO, told the Fort-Worth Star-Telegram.
John Caulfield is a senior editor at BUILDER magazine.
Learn more about markets featured in this article: Dallas, TX.