Market Conditions in Fremont>Question Details

Menudo Bongo, Home Buyer in 94085

John Laing Homes Bankruptcy , effect on their half finished projects in the Ardenwood area of Fremont ?

Asked by Menudo Bongo, 94085 Sat Feb 21, 2009

I believe the builder has filed for Chapter 11 Bankruptcy protection. What will happen to the project (Villa d'este in the Ardenwood area of Fremont) going forward ? Will somebody take over and finish the project, or what else may happen ? Has this happened in the Bay area earlier ?

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Menudo,

John Laing is done in Northern California. All there projects will eventually be liquidated including Villa d'est. The key question for you is who is the ultimate buyer. The most likely buyer will be one of the public homebuilders like Lennar, Toll Brothers, DR Horton etc. If it's one of the larger public that buys it, they will most likely build out the project immediately.

If for some reason the ultimate buyer is an investment fund, they might have a different business plan that might include just sitting on the land for 3-5 years until the housing market improves.

This is really the first issue like this in the Bay Area, but there are dozens of similar "broken" projects in Sacramento, the central valley and the rest of CA. The difference is that in the Bay Area, the value of a house still far exceeds the cost to build it, so the land has value. In places like Merced, the cost to build exceeds the maket value of a house, so in places like that when a builder gets foreclosured or goes bankrupt and the lots get sold, there is no chance the project will be built out today. Those projects probably won't be built out for at least 5 years.
0 votes Thank Flag Link Wed Apr 22, 2009
It is almost finalized that John Laing Homes is going into liquidation. The latest chain of events culminated in the bankruptcy judge agreeing that there is no real reason why the builder should not be converted to Chapter 7, given that liquidation is imminent and there are no viable prospects for reorganization. It is likely that some of the properties will be taken over by investment firms in a bulk sale.

On the other hand, with real estate markets showing some signs of recovery, there has been a flurry of interest by individual home buyers. I looked at the report which Jeanne referenced. Apparently there is now a new list of the properties with unit numbers and release prices., beyond the initial list of Abandoned Properties. It does look like the builder is prepared to sell these units to both funds and home buyers.
0 votes Thank Flag Link Mon Jun 8, 2009
One way you might be able to determine how that affects you is to check to see if your particular parcel is listed as an Abandoned Project. If you haven’t been able to find out the status of Villa D’Este yet, there is a detailed report available at a site called The Downturn Analyst. They say that they have obtained a list of John Laing Homes’ Abandoned Projects. I haven’t seen the list myself but you might want to check it out.
0 votes Thank Flag Link Fri Mar 13, 2009
Hi Menudo, I am sorry to hear of your situation, but you may be "ok."

I'm sure you have already seen this, but just in case, here is the Business Week story:
http://www.businessweek.com/ap/financialnews/D96FCINO1.htm

What may be of much more use to help you understand exactly what is happening, with contact names/numbers that might be able to more thoroughly answer what options you have, see the "web reference" link below, which states:

"The declaration gives detailed description of what parts of the debtor's business the debtor intends to continue during the Chapter 11: Southern California homebuilding, John Laing luxury homebuilding, John Laing custom homebuilder operation. All other building operations are said to have stopped, and the chief restructuring officer indicates all landholdings outside the three surviving homebuilding operations will be sold."

Further, there is a reference to "PACER" [ http://pacer.psc.uscourts.gov/ ] in the second link, which allows you to download the actual bankruptcy docs at $0.08 per page.

Between these two sites you should be able to uncover more details about your personal situation.

Best Regards, Steve
http://www.Steven-Anthony.com
0 votes Thank Flag Link Sat Feb 21, 2009
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