The downward spiral of real estate appears to have taken another developer into Chapter 11.
Lake Burton Development, LLC, owned by Killearn, and the developer of Waterfall Country Club and Waterfall at Lake Burton, filed a Chapter 11 petition in the Northern District of Georgia on July 10, 2009. Case No. 09-22830-reb. The company was recently identified as owing significant past-due taxes in Clayton County.
As Banks are getting much more strict about their lending, they are refusing to grant permanent loans or renew construction or development loans, especially where the loan-to-value ratio has changed significantly. I’ve met with several builders and developers in recent months, and they consistently say that lenders are either not working with them at all, or demanding a paydown of the loan to get the ratio in line with their guidelines. Since homes are not selling, and often builders are competing with foreclosed properties next door, the options are often to close down or try Chapter 11.
Scott Riddle’s practice focuses on bankruptcy and litigation. Scott has represented Chapter 11 debtors, creditors, trustees and other interested parties in bankruptcy cases and bankruptcy litigation. For more information, click here.