Looks Like Mercedes Homes Is Sticking Around.

By
Real Estate Agent with Gaston And Sheehan Realty

I got the news today by email.

 

Mercedes Seeks to Exit Bankruptcy

Source: BIG BUILDER News
Publication date: 2009-07-17

By Teresa Burney

Mercedes Homes announced today that it has struck a deal with its creditors and hopes to emerge from Chapter 11 bankruptcy by the end of September, eight months after filing for court protection.

If successful, Mercedes would be one of the first builders of its size to get out of Chapter 11 as a going concern. The Melbourne, Fla.-based builder said it plans to continue building homes if its reorganization plan, which was filed July 10, is approved.

Mercedes said in a news release Friday that the plan has the support of its secured creditors, banks, and the committee representing its unsecured creditors. Objectors to the plan will be able to lodge their complaints before a judge for the U.S. Bankruptcy Court for the Southern District of Florida rules on it.

The general terms of the proposed reorganization plan call for handing over the stock in the reorganized company to one of its two big creditors and the other creditor rewriting its loan to Mercedes.

The plan would void all the company's current common stock, which is held in an employee stock ownership plan, and issue new stock to Real Estate Investment Ventures, a lender that is owed about $68.5 million in principal and $2.1 million in interest. The debt to the company is secured by the company's assets.

The company's other big creditors, the lenders on its revolver, would issue new loans to cover 90% of the $140 million they are owed.

The $1-million-plus of taxes the company owes would be paid in full. Priority unsecured claims of $765,646 would also be paid in full.

General unsecured claims would get between 12% and 15% of the $40 million to $50 million they are owed.

Mercedes' Space Coast Truss, Inc., which is in debt for $567,000, would be sold and the proceeds given to its lienholders.

Courtesy of Big Builder Online and William Hayes, Mercedes Homes Sales Associate

http://www.bigbuilderonline.com/industry-news-print.asp?sectionID=363&articleID=1019292

Posted by

Stephanie Zellous, ABR

Prudential Texas Realty


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Rainer
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Ryan Shaughnessy
PREA Signature Realty - www.preasignaturerealty.com - Saint Louis, MO
Broker/Attorney - Your Lafayette Square Real Estate Partner

Stephanie - Unfortunately, we are seeing builders simply liquidate as opposed to reorganize.  We are down to a handful of active builders in our area.

July 18, 2009 12:54 PM #1
Rainmaker
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Betina Foreman
512-771-6318 Austin Home Girls Realty - Austin, TX
Realtor, C.N.E. Selling Homes in Lake Travis & Central Austin!

Interesting post. It is always good to know whats going on with the local builders. Thanks!

August 27, 2009 08:05 AM #2
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Stephanie Zellous (512) 971-4875

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