Wall Tumbles
Word just in that another of our friends–Steve Wall of Wall Homes–has filed BK for his company, backed by $50 million from private equity partner Warburg Pincus.
- The Fort Worth Star-Telegram covered the story this weekend.
- Builder senior editor John Caulfield offers this analysis of Wall’s collapse, plus Steve Wall’s plans to reemerge from Chapter 11 a stronger company.
Stephen Wall, the builder’s president and CEO, said that his company’s goal is to complete houses under construction and come out of Chapter 11 leaner and better positioned for when the local housing market recovers. Indeed, Wall Homes’ bankruptcy filing states that it expects to close at least 25 homes within the first 20 days after filing. The company also intends to continue selling homes while it reorganizes under Chapter 11. (When it filed, Wall Homes’ lenders were refusing to provide capital for any homes that haven’t already been sold.) The builder and its subsidiary Wall Homes Texas LLC (its field operations) entered Chapter 11 with 92 employees, of whom 68 are superintendents, salespeople, and other field personnel.
Perhaps the most sobering aspect of Wall Homes’ concession to the moment’s hostile environment is that it’s a Texas builder, where the margins run tight but where the volumes stayed steady for longer than most of the bubble markets. Maybe recent weakness in oil prices has made it so that even that dog won’t hunt.
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[...] Choice Homes Inc. has built over 39,000 homes, mostly for first time buyers. The company has now said that it will pay its bills and shut its doors. Apparently the company was doing so well in 2003 that they were considering an IPO. In 2005 the CEO left to start Wall Homes which later filed for bankruptcy. [...]