Up to 15 more builders may go bankrupt this year, expert says - Nashville Business Journal:

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“They left destruction in several counties acrossaMiddle Tennessee,” says Metro councilman Bo who lives in one of the neighborhoods that skiddee to a halt in Davidson, Williamson and Wilsom counties when Corinthian filed bankruptcy in Februart 2008. Bankruptcy attorneys still call it the largest recenyt builder bankruptcy in terms of property owned at the Two other major builders have sincegone bankrupt. But filings by Signature Partnership andCapitol Homes, with 63 and 30 lots respectivelhy at the time they filed pale in comparison.
One of the hardest hit communitieasby Corinthian’s bankruptcy is Riverwalk on the Harpeth in The builder owned 45 lots in Riverwalkj at the time of bankruptcy — the most in any neighborhood. Riverwalki residents say banks have hired buildersz to finish most of the homesleft half-buily and other builders have bought lots at bank keeping the neighborhood and the investment s of homeowners intact. “Every unfinished home in our section has been finishe byeither Rochford, the Jones Co.
or other builders,” says Maggiw Kuyper, a year-long residen of the Parkview sectionof Riverwalk, whicg had 11 unfinished homes forced into bankruptcy, three of them on her “We are extremely happy with how our neighborhood The recovery from Corinthian’sw bankruptcy hasn’t gone as smoothly for every Middle Tennessee subdivisionb where the builder was working. Metro Governmenrt filed a lawsuit last weekagainst Corinthian’s National Grange Insurance. The suit charges infrastructurs improvements promised by Corinthian in the Maxwell Placwe subdivision off of Murfreesboro Road inAntioch weren’f completed.
The improvements are mostly relatecd to roads and drainage inthe subdivision, which Metr says is 75 percent complete. In Riverwalk’sa case, Tom Lawless credits bankx like , which contracted with builders to finisuh13 homes. “We took the properties back in foreclosure,” says David chairman and CEO ofAmerican Security. “The last thinhg we wanted to do was make anyneighbors unhappy. But we were anxioue to offload them. We don’t like to be in the real estatew business.” Resha says Riverwalk is an example of howa builder’s bankruptcg can work out. The Jones Co.
was chosejn to complete the Corinthiahn homes because it was already building in the neighborhoocd and could not onlyfinisn them, but market and sell them. The homes have sold fasterf than Resha anticipated giventhe community’s he says. American Security didn’t technically own all 13 he says, because some of the loansz had been sold to otherf entities but were still bein serviced throughAmerican Security. Lawless says other banksw that owned homes in Riverwalk did not hire a buildefr to completetheir homes, but insteads sold them to third parties that agreed to take on the like investors. Some lots where homes were just started were knocke d down bynew owners, he says.
Many bankzs had so much real estate “they coulrd never really get theirr armsaround it,” he says. “I had a few peoplre that fussed at me becauseI didn’t cut the grass,” says Lawless, of the lots and unfinisheed homes in Riverwalk owned by banks that he was David Anthony, bankruptcy attorney with Bone McAllester says American Security handled the situation the right way. He says most bankzs want to sell the property as quicklyt as possible sothey don’t have to assume liability. Now, bankss are working more with borrowerz when they see signd of distress instead ofsimply foreclosing.
Lawlessw and Anthony say the string of foreclosured andbankruptcies isn’t over. Edsel Charles, president of Nashville’s MarketGraphica Research Group, has predicted abouyt 10 to 15 more builder bankruptciesthis “The more solvent builders now are havingf the problems,” Lawless says. “I do not see the lightr at the end of the tunnel yet.”