According the latest filings in the Chapter 11 bankruptcy reorganization case of Sacramento builder and developer John Reynen, co-owner of Reynen & Bardis Communities, Inc., owes $973 million in various personally guaranteed loans taken out during the housing boom, the Sacramento Business Journal reported recently.
Reynen filed for Chapter 11 bankruptcy in April. It was a move intended to give Reynen & Bardis, which Reynen founded with Christo Bardis in 1969, its best chance for survival, company spokeswoman Michele McCormick told Builder.
“They have renegotiated and restructured about $200 million in loans to the business, and they have a number of other restructuring processes with lenders in the documentation phase right now,” McCormick says.
But make no mistake, Reynen & Bardis is very much in a fight for its life, McCormick says.
“There’s no question about it, but at this point, the outlook is significantly brighter than it was several months ago,” she says. “The financial restructuring and the votes of confidence from a number of lenders paint a far more positive picture.”
That restructuring allowed the builder to reopen a number of subdivisions (McCormick declined to say how many), and try to sell its homes. The company is only operating the subdivisions for which it has reached agreements with its creditors, and is not building in many of its communities. Because of the market, selling homes is still a great challenge.
Reynen & Bardis has cut its head count between 40 and 45 percent, McCormick says, and is now down to roughly 80 full-time employees.
The Sacramento Business Journal reported that the land Reynen & Bardis bought during the boom could have been worth as much as $2 billion before land values sank.