Thursday, February 07, 2008

Follow up: Omaha area builder of luxury homes Gateway Builders files Chapter 11 bankruptcy petition. Gateway Homes Inc. is seeking protection from creditors in a Chapter 11 bankruptcy filing, after subcontractors filed at least 100 construction liens against the custom-home builder in the past month. Bob Ginn, Gateway's attorney, said Monday that the company has obtained the cooperation of its largest financing banks to complete and sell homes now under construction in order to maximize the return to all Gateway creditors. He plans to file motions seeking for that to happen, but a bankruptcy judge must approve the motions for construction to proceed. Gateway said in court papers that it owes a total of $3.28 million in unsecured claims to its 20 largest creditors. Court documents show Gateway's estimated assets are $0 to $10,000, but Ginn said that amount was mistakenly reported. "If that box was checked, it would be checked in error," Ginn said, "because the total assets would be in the $1 million to $10 million range." Ginn said Gateway's total inventory consists of eight custom homes under construction and 19 spec homes, which are homes without a specific buyer built on speculation that they will sell. Of the spec homes, some are completed and are models that prospective buyers can tour, while others were still under construction, Ginn said. Most are nearly finished, he said. Gateway owner Kevin Hebner declined to comment Monday and referred questions to Ginn. Gateway, a builder of mostly $250,000 to $400,000 custom homes, closed its doors two weeks ago and halted construction as subcontractors and suppliers filed dozens of liens. Construction liens are notices placed on public record of a debt due. Anyone who performs services or provides goods for improvements on real estate can file a lien within 120 days from the last date that services were performed or goods were provided. If a property has a lien, its sale cannot close unless a lien has been dealt with in some manner, ranging from lawsuits to foreclosures or payment. Chapter 11 allows a debtor to reorganize or liquidate according to a plan. "Filing bankruptcy allows us to sell the houses, and the creditors' interests are protected because their liens attach to the sale proceeds," Ginn said. "If we didn't file the bankruptcy, we couldn't sell the houses, because we would have to some way take care of those liens." Ginn said he would file a series of motions seeking authorization to complete and sell the homes under construction and formulating a method to assess the validity and amount of claims and liens. Ginn said he probably would file the motions this week. But it is highly unlikely a judge would enter his decision on the motions before a March 6 meeting of creditors at the Roman L. Hruska Courthouse in Omaha, Ginn said. There also are required waiting periods for objections. "We understand the urgency and will move forward as quickly as we can, but within those constraints," Ginn said. There could be more creditors than mentioned in the bankruptcy filing's "list of creditors holding the 20 largest unsecured claims." A dozen suppliers and subcontractors contacted before and after the filing declined to comment or did not return phone calls. The companies include lumber suppliers, plumbers, cabinet makers, carpet suppliers, concrete companies, brick suppliers, electricians, hardwood floor installers and insulation companies. The deadline to file a proof of claim is June 4.

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