Builder files bankruptcy to get house in order

Posted February 3, 2009
Updated March 9, 2009

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— A stagnant housing market and tight credit have combined to force St. Lawrence Homes Inc. to seek bankruptcy protection.

The Raleigh-based homebuilder filed a Chapter 11 petition on Monday in an effort to restructure its finances. The petition listed $158 million in assets and $116 million in debts to lenders, contractors and others.

"We do feel like we have the financing to go forward," company spokesman Richard Ohmann said.

St. Lawrence Homes sign Credit crunch, economy force builder into Chapter 11

Founded in 1989, St. Lawrence builds about 150 to 250 high-end homes in the Triangle each year. It has developed neighborhoods from Fuquay-Varina to Creedmoor, including Waterford Estates in Cary, Northampton in Wake Forest and Trenton in Durham.

The company gained widespread publicity last year when it partnered with the Carolina Hurricanes to give away a $300,000 home in Wake Forest in honor of the NHL team's 10th year in North Carolina.

Ohmann said the company has 139 finished homes on the market, including more than 40 in the Triangle. St. Lawrence also operates in Charlotte and Wilmington, as well as Cincinnati.

"People love our houses. We're banking on that," he said, noting the company plans to continue operations through the reorganization.

Real estate agent Connie Floyd said she was surprised to hear about St. Lawrence's bankruptcy and said it doesn't bode well for local builders. Still, she said, home buyers with good credit can find great deals in the market if they can sell their existing homes.

"There is certainly not the desperation here we see in other parts of the country. A lot of our hold-up is people relocating to the area and not being to sell where they're coming from," Floyd said.

Mike Walden, an economist at North Carolina State University, pointed to the slack local market for existing homes – sales were down 47 percent in December from the previous year – as evidence of trouble for homebuilders.

"This financial situation really didn't have its origins here in the Triangle, but we're tied into the national financial system," Walden said. "The entire economy can't get healthy until the housing market gets healthy. This recession started in the housing market, and I think it will have to end in the housing market."

Several area homebuilders went to Washington, D.C., last month to lobby for tax and mortgage incentives to encourage people nationwide to buy homes. Some planned to make a second trip Thursday to deliver a petition with 3,000 signatures to members of Congress, asking that money in the federal stimulus package go to the home-building industry.

Walden called St. Lawrence's bankruptcy "an unfortunate circumstance," but said it shouldn't have a negative impact on the area's long-term economic future.

"I think the immediate situation is very trying for homebuilders," he said.


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  • tootiefrootie Feb 3, 2009

    I'm stunned to read Bob Ohmann and his financial advisors allowed he and his shareholders to continue building at such a pace. What? Hello! Many national builders were in this slump now and years ago. Did he think he was just above everyone else and the housing slump would never affect him? Some folks made some bad business decisions here, ostriches?

  • superman Feb 3, 2009

    I love his houses-- but I just cannot afford them. I guess some people are in the same boat with me as he cant sell them. Perhaps he could turn them into apartments and rent them out. Houses on the market are so big and the land so expensive that people cant afford to buy them.

  • whatusay Feb 3, 2009

    SubwayScandrel...And why would this company have that many new homes on the market with no buyers, and probably building more as we speak?

  • SubwayScoundrel Feb 3, 2009

    Whatusay, Bankruptcy does not allow you to walk away. It gives you time to restructure to pay your debts. What this article does not say is all those assets have so many leins on them, they can not sell and can not walk away without a lot of work nad handing over the assets. The reason why they can not pay the contractors and people is that the $116M in assets are in finished homes just sitting there. Good Company and hope they can move forward

  • TeresaBee Feb 3, 2009

    Wow. One more company not to send a resume to.

  • Wheelman Feb 3, 2009

    I thought your debts had to exceed your assets in order to file for any type of bankruptcy.

  • ObamaMustGo aka NCcarguy Feb 3, 2009

    I guess you all don't really understand how many this will affect....Engineers, Architects, building suppliers, sub-contractors.....the local deli, the coffee shop near by....This is more bad news that the "No MORE growth" crowd wished upon us...and it's here!

  • Timtooltime Feb 3, 2009

    How can you file Bankruptcy when most of your employees are Illegal Immigrants? These bad times sometimes have a ray of sunshine that you can not see !

  • whatusay Feb 3, 2009

    I understand the concept of bankruptcy but I find it hard that this company is talking about stiffing all the people and companies he owes money to and is looking forward to a new home building business as soon as his debts are washed away. This is exactly the reason this country is in the shape we see today. People buying more than they can pay for and then wanting all their debts to be forgiven. I think there should be at least a 10 year waiting period before he can start up in the same business.

  • kggg21 Feb 3, 2009

    Wonder how many builders are going to follow the leader?