CFO Garry P. Herdler has resigned from Orleans Homebuilders, which is scheduled to be auctioned out of bankruptcy to the highest bidder in late June.
Herdler’s last day will be April 23. The 40-year-old has served as the company’s CFO since March 2007.
Orleans, which filed for protection from creditors under Chapter 11 of the Bankruptcy Code on March 1, now has a chief restructuring officer, Mitchell Arden, who is managing the company and overseeing the process of selling the majority of the company’s assets.
"We appreciate Garry's dedication, creativity, and hard work over the last three years,” said Jeffrey P. Orleans, the company’s chairman, CEO, and president, in a statement announcing the resignation. “We also appreciate his commitment to stay with the company to complete the definitive sale agreement announced last week. We have been through significant challenges together during this lengthy and historic housing downturn."
NVR placed the first “stalking horse” bid April 13 to buy the majority of the company, offering $170 million for most of the company’s assets, including substantially all its currently active and future communities, joint ventures, controlling interests in land, customer deposits, trademarks, and intangible assets. The land holdings comprise about 4,300 lots.
Orleans began marketing itself for sale last year, contacting about 138 potential investors. As a result, 22 signed non-disclosure agreements and started due diligence, according to bankruptcy. There was also one other serious buyer other than NVR that is expected to bid. Industry insiders say the other serious buyer is Toll Brothers.
The auction is expected to be held June 23. It will cost anybody other than NVR more than $170 million. Any other winning bidder must pay NVR a $3.4 million termination fee and up to $1 million in expenses. Bidding increments must be at least $1 million.
It’s possible that the company’s assets will end up with more than one buyer since the auction documents allow bids on the company’s assets individually by region as long as the total purchase price is the highest.
Orleans’ northern region includes operations in southeastern Pennsylvania, central and southern New Jersey, and Orange County, N.Y.
The builder's southern region consists of Charlotte, Raleigh, and Greensboro, N.C., including adjacent counties in South Carolina, and Richmond and Tidewater, Va.
The Midwest region includes Chicago, and its Florida region includes Orlando assets.
There are also two other developments in the company’s northern region that are being held off the sale list, but that could be included in the bidding.
A bidding procedures hearing is scheduled for May 4.
Teresa Burney is a senior editor for BUILDER and BIG BUILDER magazines.