Orleans Homebuilders terminates sale agreement to negotiate plan

By Caroline Salls

Pittsburgh, May 19 - Orleans Homebuilders, Inc. will negotiate a plan of reorganization with the support of its senior lender group and has terminated its asset purchase agreement with NVR, Inc., according to a news release.

The company has also cancelled the May 21 hearing on its motion to approve the bid procedures related to the NVR sale agreement.

According to the release, Orleans expects to file a plan in late summer and would hope to emerge from bankruptcy in late fall.

"Over the past several weeks, the company has been in active dialogue with a number of parties regarding its strategic options," Orleans' chief restructuring officer Mitchell B. Arden said in the release.

"It is clear from these discussions that pursuing a plan of reorganization appears to be the best course of action for the company and its constituents.

"As part of this process, and before we prepare and file the company's plan, we believe that we will be able to restart homebuilding even for those units under contract on which construction has not yet begun.

"At the same time, we should be able to reinitiate sales and marketing efforts on new homes. We hope to have the necessary financial support to undertake these new construction and sales efforts in a few weeks."

Orleans Homebuilders, a Bensalem, Pa.-based developer, builder and marketer of single-family homes, townhouses and condominiums, filed for bankruptcy on March 1 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 10-10684.

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