Private home builder Barratt American, based in San Diego County, CA, has finally filed for bankruptcy protection after months of wrangling with its lenders, chiefly Bank of America. From a BigBuilderOnline.com story:
On Christmas Eve, coal filled the stocking of Barratt American Inc., as the company filed for Chapter 11 protection in the U.S. Bankrupcty Court for the Southern District of California.
Mick Pattinson, president of Barratt American, said the company will "continue to build custom homes and fire replacement homes as we sell existing assets and reorganize our company with a view to re-commencing new-home construction in 2010. We do not foresee any recovery in the housing market that would prompt speculative home development in 2009."...
According to Pattinson, the trouble started when, after a 27-year relationship, Bank of America froze the company's credit lines in August 2007. The bank has since foreclosed on 11 of Barratt American's assets, Pattinson added...
In June, Pattinson formed the Building Industry Coalition for Economic Recovery to promote awareness of what he saw as "bad behavior" by banks serving the home building industry. To date, there are 154 coalition members who, according to Pattinson, are "victims of contrived defaults and made to order appraisals as banks disengage themselves from residential lending and instead pursue builders for recovery and fulfillment of personal guarantees."...
Barratt American has been a key Californian home builder for more than 25 years. In 1991, Pattinson became president and CEO of Barratt American, a wholly-owned subsidiary of U.K.-based Barratt Group. In 2004, Pattinson purchased the North American operations of the company for $165 million.
A sad day indeed. Barratt built a nice, high-quality home and was once a regular client of mine. I'm hopeful they'll return better and stronger for the rebound.
1 comment:
I read an article on Barratt American on this site, Homebuilder-Bankruptcy, that said that they owe Bank of America $79 Million and Guaranty Bank $27 Million. Doesn't look like they might get out of the hole soon.
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