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Published Wednesday, Sept. 30, 2009 | 11:32 a.m.
Updated Wednesday, Sept. 30, 2009 | 3:42 p.m.
Jim and Glynda Rhodes
Related Document (.pdf)
Sun Archives
- Cancer Institute: Rhodes pledged $11 million, gave only $600,000 (5-4-2009)
- Rhodes faces lawsuit separate from bankruptcy case (5-1-2009)
- Rhodes' lenders want him out (4-25-2009)
- Rhodes Homes files for Chapter 11 (4-10-2009)
- Rhodes homebuilding companies file for Chapter 11 (4-1-09)
Las Vegas homebuilder Jim Rhodes has agreed to turn over most of his Southern Nevada residential development operations to lenders to close his companies' bankruptcy cases, court records show.
A plan filed last week also says Rhodes' companies will pay the lenders $3.5 million and Rhodes will maintain control of some operations in Arizona.
The plan was filed by lenders led by Credit Suisse Group AG that say they are owed $325 million. The Southern Nevada assets they are picking up include Rhodes' Rhodes Ranch and Tuscany developments.
Rhodes Ranch includes about 314 finished and unsold home lots and another 1,993 lots that have yet to be developed. Tuscany has about 350 finished lots and another 599 partially developed lots, records show.
Rhodes is the founder and president of Rhodes Homes and will not be part of the new Nevada homebuilding company emerging from the bankruptcy.
Rhodes said in a statement today: "This agreement was reached following extensive and positive negotiations between the main constituents."
"There is significant value to the holdings and to the continued operation of the homebuilding entities that make up Rhodes Homes. Our consistent focus was to create a solution that would provide the best results for current homeowners, that will keep people employed building new homes and that will ensure that trade claims will be paid. We accomplished that," added Rhodes, who has blamed the recession for his companies' inability to meet debt payments and their subsequent bankruptcy filings in March.
Rhodes Homes will be managed by a board of directors appointed by the lenders, and since Credit Suisse and the other lenders aren't in the home-building business, they're likely to be looking for buyers for the Rhodes Homes assets and other real estate assets they control in Southern Nevada.
The bankruptcy case has illustrated the rise and fall of the Las Vegas real estate market, in the late 1990s and through mid-2006 consistently one of the hottest in the nation.
Las Vegas home prices have fallen 54.8 percent since their peak in August 2006, debt-rating company Standard & Poor's reported Tuesday. Besides the subprime mortgage meltdown, the Southern Nevada market has been hit hard by the U.S. recession that has reduced travel to Las Vegas and curtailed big construction projects. Unemployment has soared in Southern Nevada, hitting 13.4 percent in August.
Rhodes, records show, had developed 40 communities in Nevada and Arizona since his companies were founded in 1988, generating more than $2.4 billion in revenue. Those developments included more than 6,000 homes in the Las Vegas Valley.
But in 2005, when money was easy to come by, the majority of the Rhodes Homes assets were used as collateral for a $500 million credit facility arranged by Credit Suisse -- also a big lender to the bankrupt Lake Las Vegas and Park Highlands planned communities. It was that loan that Rhodes defaulted on, pushing the company into bankruptcy.
Now, court records show, the value of the Rhodes collateral has declined so dramatically during the recession that the first-lien lenders project recovering only about 24 percent of the $325 million owed to them, up from $302 million when the bankruptcy was filed.
The lenders said their experts concluded that liquidating the Rhodes Homes land and assets would fetch only $42.5 million for creditors, but that operating the company and continuing its home-building operations would result in a recovery of $88.1 million as the real estate market is projected to improve by 2011.
The plan projects holders of $70.6 million in second-lien notes will recover just 2.8 percent of their claim.
Trade creditors, estimated to be owed $500,000 to $1.5 million, would receive a 100 percent recovery.
Holders of up to an estimated $15 million in asserted general unsecured claims would receive less than 1 percent.
Objections to the plan are due by Dec. 3 and a Dec. 17 confirmation hearing in U.S. Bankruptcy Court in Las Vegas has been scheduled.
The plan will be funded with home-building operations, Rhodes' cash on hand and expected recoveries from a pending lawsuit, the first-lien lenders said in their plan.
Besides the golf communities Rhodes Ranch in southwest Las Vegas and Tuscany in Henderson, court records show the Rhodes assets include Spanish Hills, a high-end development in southwest Las Vegas. As of March 31, Spanish Hills had two partially-developed single-family estate lots, two finished lots remaining to be sold and 10 acres of undeveloped land.
The northwest Arizona operations to be retained by Rhodes include Pravada, a development in the Kingman area of Mohave County that has 3,591 partially developed lots on about 1,312 acres.
Interesting that he's retaining interest in Arizona properties. His dream of developing the "Golden Valley" near Kingman always seemed far-fetched, even with the new bridge. Just hope Glynda hangs in there-remember, the chickies don't go for older Poor men. Right, Jim?
The entire family is greedy. He paid his wife and brother exorbitant amounts before filing that any other person could live off the interest alone. He will rebound and suck the system dry again and they'll continue do this all over again until the laws are changed. They believe because they have money, they're special and require special treatment. They're an ugly nasty family. Karma will come around to their family or members of their family.
No matter how much money they pretended to have, Jim and Glynda Rhodes, were exposed as social climbing failures from day one.
They were never on our A list. They were never invited to the best of events. Black balled.
We considered them tacky, common, with zero taste who smelled.
Is he still paying Erin Kenny?
Caroll - you sound hot. Are you looking for a clean cut "B" lister to hang on your arm for these spectacular events? I wear Brut For Men, so I think I smell pretty good. I like the company of very old women (and you probably fit that bill), which makes me "uncommon". Interested?
I wonder how all of the sub-contractors he screwed feel now?
Caroll - i really need to hear from you soon - my offer won't last forever... i'm not tacky at all and i think we'd be a great match. Can't wait to see you at the next A list event. From how you pat yourself on the back, I can tell you're really really really special!
Eric Kenny wasted a lot of knee pads on this guy. Too bad.
For all the beating that Jim takes in these blogs those that really know him know that he has done more to help this community than so many of the so called "A" listers. Where are those A listers now? I will tell you where....quietly defaulting on payments across the board.
Outside all the homes and people that got thrown under the bus from this financial blunder, I hope the Suisse Bank people realize the quality of the staff at the Tuscany Golf Club. The golf course may not be a large percentage of the total value of this company, but as a regular customer, they get it. They have made a good golf facility GREAT!!
how did this guy stay out of jail? and how the "Mighty" have fallen!
You guys, be nice! We all are in the same boat. You cannot cry over spelled milk. All homeowners in Tuscany...move on! Let's take care of our Community. Let's plant more flowers in places where some did not survive! Let's donate again some money(or goods-for garage sale, so our Social Club will again have some funds) for all these things THAT NEED TO BE FUNDED FOR OUR FORTHCOMING EVENTSs, still continue to re-unite all our family to enjoy Tuscany Village. Let's be all POSITIVE!
Caroll, I can't even believe you would deign to read the paper of the commoners, The Sun. Surely you are much too important!
Pravada is not the real exit strategy for the Rhodes family.
Here is the real story about Jim Rhodes' exit strategy project:
http://www.azcentral.com/arizonarepublic...
"[Rhodes'] Desert Communities will pay 10 percent down and finance the rest of the deal with the state over seven years, State Land Department officials said."
As quoted above, Rhodes is paying for all of the land he is buying from the State of Arizona on installment terms under a garden variety mortgage. As long as he can keep up the payments, the Rhodes family will have a significant influence on the future of the eastern Phoenix metropolitan area.
The land the are buying from the State of Arizona is generally flat, dry and boring. He can built little tacky homes for 1 million people, if they really want to buy them. The area has nothing to recommend it, except a huge state prison.
Still, when they let Rhodes bid to buy this state land on installment terms, the State of Arizona employees later said knew nothing about Rhodes troubles here in Las Vegas, including the Erin Kenney situation. They expressed surprise at Rhodes Homes bankruptcy. The newspaper covering the east Phoenix suburbs, East Valley Tribune, did quite a series of stories about Rhodes when he bought the land and when the Las Vegas area bankruptcy was filed, but at the time of the Las Vegas bankruptcy the State of Arizona agency which sold Rhodes the land said as long as he kept making his mortgage payments to them, they would let him go ahead and master plan the 275 Square Mile area covered by his contract with the State.
See:
http://www.eastvalleytribune.com/story/8...
http://www.eastvalleytribune.com/story/1...
http://www.eastvalleytribune.com/story/1...
http://www.eastvalleytribune.com/story/9...
Even more stories if you run Rhodes and Flatten through their search engine.
It sounds like Mr. & Mrs. Rhodes will feel right at home in their new base of operations, probably tony Scottsdale, which, of course, is tastefully far away from the land they will be planning and developing:
http://www.eastvalleytribune.com/page/pr...
The interesting "number" to calculate is just how much cash Jim Rhodes got out of Credit Suisse when he refinanced his Las Vegas projects with them.
In L.A. mortgage banking circles, during the early 2000's, Credit Suisse Cayman Islands Branch was known as the most careless lending institution in the commercial real estate universe, because they made loans based on over valued appraisals, took huge loan fees, and then sold off pieces of the loans to stupid foreign investors. Because they were not regulated in the United States, the investors were relatively defenseless when Credit Suisse was "over exuberant" about a project's future. So venal were Credit Suisse's employees, a bankruptcy court in Montana recently severely punished them for wrongdoing against a borrower. In the case of Rhodes Homes, it seems like Credit Suisse's investors, rather than Rhodes Homes, got the short end of the stick, which is why this Chapter 11 Plan is being made without opposition from Jim Rhodes.
So now the investors to whom Credit Suisse sold pieces of their Rhodes Homes loan will get the Las Vegas land, and Mr. & Mrs. Rhodes will get a pleasant new life in the Valley of the Sun.
Most ironic, Rhodes Homes former Chief Financial Officer, Fred Chin, is now running Lake Las Vegas for Credit Suisse. Anyone want to take a prop bet that Fred Chin will end up running Rhodes Homes for Credit Suisse?
i'll take that bet. how much?