Colorado – Village Homes struggled to secure financing from lenders in the months before filing bankruptcy. In some cases, the company could not get funding until it sold a certain percentage of townhome units, according to Matt Osborn, son of company founder John Osborn.
The company now is seeking approval to access about $2 million in cash over the coming months and to continue closing on new- home sales, Osborn said. Village Homes, which has built more than 10,000 homes in Colorado since it was founded in 1984, hopes to resolve those issues “fairly quickly,” he said.
“It has been frustrating I know, for them and for us, to continue delaying these Denver homes ,” he said. “We want to get back to operating under normalized business conditions, but we haven’t been able to get there yet. “Village Homes builds new homes new throughout Colorado and has communities in Fort Collins (Larimer County), Longmont (Boulder County), Arvada, Westminster (Jefferson County), Aurora (Arapahoe County), Denver, (Denver County), Granby (Grand County), New Castle (Garfield County), Grand Junction (Mesa County), Parker and Castle Rock (Douglas County).
Work on homes under construction and the building of new houses has been frozen since the Chapter 11 filing and will be on hold until the company arranges financing necessary to pay contractors, according to the company’s lawyer Garry Appel.
“We’re working hard to line up those funds,” said Appel, adding that the company cannot use the $2 million in cash for construction costs.
Osborn said it could take at least a couple of weeks.
Even though they are upset, some buyers are understanding of the situation. Ackley said she “is standing by the company” and has faith in its ability to emerge from Chapter 11. Ackley added that Osborn has called at least a couple of times to provide updates.
“I was very satisfied with the deal they made, the product, the quality,” said Ackley, who bought a $313,000 home and is staying with a friend in Aurora. “I want to live out my years in this home.”
Court documents list more than 40 customers with deposits totaling roughly $430,000. Those who want to close on new homes should be able to before long, but customers such as the Gilferts who want their refunds back may have to wait awhile as the company restructures and works out a plan, Osborn said.
The lawyer, Appel, said the company is “hopeful” it will be able to repay people who want their earnest money back.
“It’s a very important issue,” he said, “and we’re doing everything we can to work through it.”
The place the Gilferts picked out needs only appliances and window screens. But Scott Gilfert said he cannot sell the house in Parker where he lives with his wife and three children. He put it on the market for $700,000 and has lowered the price to $649,000.
Even if he were to sell the house for a decent amount, he would be reluctant to close on the new one, partly because of concerns about the warranty.
Osborn said that Village Homes “has every intention of fulfilling those obligations” and is in talks with an outside company that would back up the warranties should the metro region’s largest privately held builder fail. Still, the company hopes to restructure and emerge from the process.
Customers, for now, may need to be patient.
