Rhodes Homes and 31 other companies, including Rhodes Homes Arizona, filed Chapter 11 bankruptcy proceedings Tuesday after developer Jim Rhodes was unable to make payments on principal and interest for a key loan.
Rhodes fell behind on payments on a $500 million credit issues by Credit Suisse, General Electric Investment Corp., Cypresstree Investment Management, Highland Capital and Sorin Capital Management. Despite weeks of negotiations Rhodes was unable to work out an out-of-court settlement with the consortium.
"During the past several weeks, Rhodes Design and Development had been actively engaged in discussions with Credit Suisse and the lender consortium about an out-of-court resolution to the company's financial position," Rhodes said in a press release.
Rhodes indicated the filing will have little effect on normal operations of the company.
But, locally, most of Rhodes’ holdings in Mohave County were included in the filing.
Rhodes Homes Arizona and Rhodes Arizona Properties are key holders of the Pravada development in Golden Valley.
Pinnacle Grading, based in Golden Valley and the main earth moving contractor for the new county jail in Kingman, is also included in the Chapter 11 petitions.
Key Rhodes assets that are included are Rhodes Ranch Golf and Country Club, Tuscany Acquisitions, Tuscany Acquisitions II, Tuscany Acquisitions III, Tuscany Acquisitions IV, the Rhodes Companies, Rhodes Homes, Rhodes Ranch General Partnership and Rhodes Design and Development Corp.
Other Rhodes companies that were included in the filing include Rhodes Realty, Geronimo Plumbing, Gung-Ho Concrete, Apache Framing, Batcave LP, Jackknife LP, Wallboard LP, Overflow LP, Heritage Land Co., Tick LP, Chalkline LP, Glynda LP, Parcel 20, C&J Holdings, Jarupa LLC, Elkhorn Investments, Six Feathers Holdings, Elkhorn Partners and Bravo Inc.
Although Rhodes promised to deliver on all homes currently on order and to continue to build and take orders on new homes, the effect on Pravada was unclear. The company has not cleared all the legal hurdles to begin building at Pravada. And, Utilities Inc., the company that is to build the water and wastewater utilities at Pravada, still has legal issues to complete before it can begin construction.
Rhodes estimates that between 5,000 and 10,000 creditors will have claims in the case.
The company’s two marquis developments, Rhodes Ranch and Tuscany Residential Village, were used as collateral on the $500 million loan. The company went into default on the loan on March 31, the same day it filed for bankruptcy.
0 Comments