On February 19, 2009, W L Homes, also known as John Laing Homes, filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to their Affidavit in Support of First Day Bankruptcy Motions, Debtors sold over 1,300 homes in 2007, generating revenues of $948 million. With the crash of housing market, Debtors’ home sales dropped to approximately 560 homes in 2008, with revenue declining to $287 million.
Prior to filing for bankruptcy, Debtors had over 100 development projects underway ranging from entry level condos to multimillion dollar homes. Through bankruptcy, Debtors plan to exit their “non-core regions” and move forward with more successful developments in the southern California region.
In the days prior to bankruptcy, WL Homes’ secured debt totaled $350 million. Debtors’ secured lenders include Wells Fargo, Bank of America, Wachovia, Indy Mac and KeyBank (among others). At $140 million, Bank of America holds the largest amount of WL Homes’ secured debt. According to W L Homes’ bankruptcy petition, its largest unsecured trade creditors hold claims ranging from $331,000 to $118,000 for construction-related goods and services. Debtors estimate their total trade debt owed to vendors to be $20 million.
W L Homes was purchased by Emaar Properties in 2006 for $1.05 billion. Emaar is a public joint stock corporation formed in Dubai and considers itself the “world’s largest real estate developer.” Since buying W L Homes, Emaar has invested over $600 million in Debtors for the purpose of asset aquisition. Emaar cut-off funding to Debtors in December of 2008.
First Steps in Bankruptcy
Prior to bankruptcy, Debtors began trimming their workforce from over 1,100 employees down to 90. The company cancelled its 401(k) matching program, along with employee bonuses. Now that they are in bankruptcy, Debtors are looking to sell off “non-core projects” and have already begun contacting lenders to turn over certain collateral. On the same day that Debtors filed for bankruptcy, they filed a Motion For Approval of Procedures for the Sale of Land. This sales procedure motion seeks to establish standard bidding procedures for the sale of undeveloped, as well as partially developed, land owned by W L Homes.
This bankruptcy proceeding is before the Honorable Brendan L. Shannon.