Orleans Homebuilders buyer sues after purchase agreement termination

By Caroline Salls

Pittsburgh, June 1 - Orleans Homebuilders, Inc. potential asset purchaser NVR, Inc. filed a lawsuit Friday in connection with the company's decision to terminate the asset purchase agreement and move forward with a stand-alone plan of reorganization, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, NVR is seeking damages for alleged breach of contract, promissory estoppels and unjust enrichment to compensate it for costs related to the negotiation and preparation of the asset purchase agreement, the bidding procedures and sale orders and other steps taken in preparation for its proposed acquisition of Orleans' assets.

"NVR was also forced to engage in extensive environmental, title and other work necessary to satisfy pre-closing conditions," the lawsuit said.

If there is no breach by NVR, the buyer said Orleans is not entitled to terminate the asset purchase agreement. NVR said no breach is alleged.

NVR said it is entitled to a $3.4 million termination fee, a $150,000 expense reimbursement and up to $1 million for all of its out-of-pocket expenses.

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

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