Wednesday, April 1, 2009 | 10:50 a.m.
Rhodes Design and Development, a big homebuilder in Nevada and Arizona, and several affiliated companies filed for Chapter 11 bankruptcy protection Tuesday in Las Vegas when they were unable to meet a principal and interest payment on a key loan, the companies said.
The companies, controlled by Jim Rhodes, developer of Rhodes Ranch in southwest Las Vegas and Tuscany in southeast Henderson, cited the economic downturn for the filings. In all, the Rhodes companies have built more than 7,000 homes in planned communities and condominium complexes.
The primary assets of the companies include the planned communities of Rhodes Ranch and Tuscany and their related homebuilding operations, Rhodes said in a statement. These assets were used as collateral for a $500 million credit facility arranged by Credit Suisse in November 2005 and funded by a consortium of financial institutions, including Credit Suisse, Highland Capital, General Electric Investment Corp., Cypresstree Investment Management and Sorin Capital Management.
"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,'' the company said. "Unfortunately, the severe economic downturn affecting the entire country has created a situation where land values and home values have plummeted and where the new home sales have fallen dramatically.''
"The economic crisis affecting Las Vegas, along with the inability to secure alternative and cost-effective financing, has hurt homebuilders harder than any other industry, particularly independent companies such as ours," Jim Rhodes said in a statement.
Rhodes said the filing will have little impact on the day-to-day operations of the company, including asset management, sales and construction, customer service, vendor relations and homeowners association functions. The company said it expected to deliver all homes currently on order as well as take new orders and continue construction of new homes.
"We are hopeful that this financial reorganization will produce successful results for residents and owners of homes built by Rhodes Homes," Rhodes said.
The companies' filing listed liabilities that were unspecified but range from $100 million to $500 million.
The companies filing Chapter 11 petitions were Rhodes Design and Development Corp., the Rhodes Companies, Rhodes Ranch General Partnership, Heritage Land Co., Tick LP, Glynda LP, Chalkline LP, Batcave LP, Jackknife LP, Wallboard LP, Overflow LP, Rhodes Ranch Golf and Country Club, Tuscany Acquisitions, Tuscany Acquisitions II, Tuscany Acquisitions III, Tuscany Acquisitions IV, Parcel 20, C&J Holdings, Rhodes Realty, Jarupa LLC, Elkhorn Investments, Rhodes Homes Arizona, Rhodes Arizona Properties, Tribes Holdings, Six Feathers Holdings, Elkhorn Partners, Bravo Inc., Gung-Ho Concrete, Geronimo Plumbing, Apache Framing, Tuscany Golf Country Club and Pinnacle Grading.
Other companies controlled by Rhodes are unaffected by the filing, Rhodes said in its statement.