Orleans Homebuilders bankrupt: Updates

NEW: Harold Brubaker's Inquirer story here lists top creditors. Case is US Bankruptcy Court, Delaware, 10-10684

LAST NIGHT: Bensalem-based Orleans Homebuilders filed for Chapter 11 bankruptcy protection in Delaware today after failing to make a deal with its bankers in recent weeks. Buyers' escrow should be safe, but will homes get built? Reuters story here.

ADD: Orleans' statement, excerpts: 

"Orleans Homebuilders, Inc.... whose operations in Pennsylvania and New Jersey date back more than 90 years, announced today that it filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code for itself and most of its operating subsidiaries in the U.S. Bankruptcy Court for the District of Delaware in Wilmington... Excluded from these voluntary petitions (is) its mortgage services subsidiary, Alambry Funding, Inc.," a mortgage broker.

"The voluntary petitions result from the final maturity of the Company’s $350 million senior secured Second Amended Restated Revolving Credit Loan Agreement... on February 12, 2010, and the inability to reach agreement on an extension of the Credit Facility with 100% of the approximately 17-member bank group... There is currently approximately $311 million of cash borrowings outstanding...

"The Company also announced that it has reached agreement with certain of its lenders for up to $40 million of debtor-in-possession (DIP) financing, pending Court approval and syndication.  The new financing consists of up to $25 million in cash revolving borrowing availability and up to $15 million of availability for replacement letters of credit under the Credit Facility (the “DIP Revolving Facility”).

"All of the Company’s 11 operating divisions in eight states will continue business in the ordinary course and without interruption. The Company has filed motions requesting immediate Court approval for the continuation of all home warranty and mortgage incentive programs and to preserve all pre-petition escrowed customer deposits on contracted homes.  The Company believes all existing customer deposits are protected in segregated escrow accounts and are not affected by today’s filing.  Building will now continue on homes under construction in all communities, as well as the closing of certain home deliveries temporarily postponed in the past two weeks.

"According to Jeffrey P. Orleans, chairman, president and chief executive officer, “We have done everything we could to generate cash flow and to reduce operating expenses in light of falling home prices and reduced housing demand," including an attempted sale of the company. But at least one lender held out, "and we could not complete the sale." He'll try to sell it in Chapter 11."We want to reassure our many current and future homebuyers that we will seek to continue to service their needs during this period," and have asked the court to approve payment of wages and worker benefits. “We regret the hardship that this filing will have on many of our trade suppliers. "

See also www.orleanshomesreorg.com. "For the next few days, a call center will be open from 8:00 am to 6:00 pm, Eastern Standard Time, at 888-215-9315. Messages may also be left on that number during other times."