WTP Client Caruso Homes Emerges from Bankruptcy
CROFTON, Md. -- Caruso Homes, headquartered in Crofton, Md., has had its plan of reorganization filed under Chapter 11 of the bankruptcy code confirmed by the Honorable Judge F. Schneider of the United States Bankruptcy Court for the District of Maryland, Baltimore Division, according to Jeffrey Caruso, president of the firm he founded in 1986.
In his closing statement Judge Schneider said, "This case is an example of how the bankruptcy code should work." He also complimented all those involved in the case including Caruso Homes' bankruptcy counsel Joel I. Sher of Shapiro, Sher, Guinot and Sandler; Jeff Caruso's personal attorney Paul Nussbaum of Whiteford, Taylor Preston LLP, each of the 10 banks working with Caruso Homes, the members of the creditors' committee, their counsel, the subcontractor community and Caruso.
The Caruso Homes' emergence plan includes a provision where certain future profits will be shared with creditors. Caruso explained he will be able to remobilize the newly positioned company with minimal personal and corporate debt and a strong balance sheet.
The company will immediately begin selling seven communities out of two regional models located in the Maryland suburbs of Washington DC.
"This is one of the most challenging real estate markets and economic environments in recent history. This is a big day in the history of Caruso Homes and we are thankful that our creditors made this possible," Caruso said after yesterday's hearing.
Caruso Homes has won more than 100 local and national awards for excellence in service, building systems, home design and many other categories. However, even though the company has well developed policies, systems and procedures, when the sales of Caruso's more than 20 communities began failing in 2005, the debt service on the 3,000 lots tied up by the company forced it into a Chapter 11 bankruptcy filing in June, 2008.
"Caruso Homes, along with its lenders and trade partners, have worked together to fashion a plan that allows us to emerge as a competitive and profitable community developer and builder," Caruso Homes executive vice president Chris Block stated. "The flexibility granted under the plan allows us to navigate business during these unprecedented times and beyond. I am confident that the company and its partners will succeed together."
The firm is already talking with investors interested in working with a company long on experience and short on debt.
With the continued support of SNS Property Finance, a Dutch corporation; Caruso Homes' Symphony Village has maintained its position as the most successful active adult community on Maryland's Eastern Shore. Mark Somerville, Caruso Homes' vice president of land development noted that, "We are fortunate that out lender had the foresight to fund the completion of clubhouse the pools and all the roadwork for this 400 lot community, in Centerville Maryland. Our sales have continued and we are entering our final section of this successful community."