A US Bankruptcy court judge today approved the confirmation plan of one of the largest home builders in the northwest, Pacific Lifestyle Homes. The approval culminates a successful reorganization of the company under chapter 11 of the Federal bankruptcy code.
This company voluntarily entered Chapter 11 protection in October of 2008 following the national downturn in the new home construction and real estate markets. Since the filing, the company has been steadily restructuring its obligations while continuing to build and sell homes.
At the time of filing Pacific Lifestyle Homes had 10 new home communities across the metro area. The company has been one of the largest volume builders in the northwest during the past ten years having built more than 2200 homes.
Originally founded in 1996, the company has twice been recognized as ?Builder of the Year? by the Building Industry Association of Clark County. The company was founded and is currently headed by Kevin Wann, who serves as the company President and Chief Executive Officer.
?This was in no way an easy process for us. We entered into the reorganization to have the opportunity to emerge as a stronger company and one that is well positioned for the future, we feel that we have accomplished this,? said Wann.
While the need for reorganization stemmed from the company?s debt structure, Pacific Lifestyle Homes has adapted business practices over the last two years to have success in a depressed new home market. ?We have made adjustments to the standard size of our floor plans, and have created value by adding more included features in our homes.,? Wann added.
The company sold 350 homes in 2005 during the peak of the recent ?building boom?. Pacific Lifestyle Homes remained a top ten metro-area builder by selling 256 and 251 home respectively in 2006 and 2007. The mortgage bubble popped in August 2008, first affecting buyers? ability to get financing and most recently seizing up the US credit markets. Since the reorganization the company has sold over 160 homes, with a about a dozen more in various stages of construction awaiting closings.
Pacific Lifestyle Homes has been a strong partner in the community having given over $ 100,000 in both 2005 and 2006 to dozens of area charitable organizations. The company has given generously to causes that support a ?quality of life? objective.
Company Pulls Off A "Near Impossible" Feat
Since the August 2007 financial implosion over 220 home building companies have filed for bankruptcy protection or simply gone out of business. Most of these builders will never emerge; in fact only about a dozen (or about 5%) have done so according to Grant Thornton Corporate Advisory and Restructuring Services.
With today?s announcement, Pacific Lifestyle Homes joins this small percentage of builders who have fought their way out. ?We are so grateful to be one of a few builders to make it through Chapter 11,? said Wann. ?It truly was the result of great cooperation from our creditors, trade partners, and employees.?
Pacific Lifestyle Homes credits several factors for its ability to rebound as a stronger company. ?The primary reasons we?re now a reorganized company are first, we secured construction financing from our lenders that allowed us to continue to build out our projects, and secondly, we executed operationally by selling over 160 homes during the process.? said Wann. Pacific Lifestyle Homes was very quick to strike. As part of their original reorganization filing the company also launched a massive sale of all completed homes. Prices were slashed. The company felt it was better to move the homes off the books, then to hold out for normal sale margins. ?We were aggressive and we acted swiftly, in retrospect, both were very good decisions,? said Wann.
What's Next
Pacific Lifestyle Homes plans on growing its market share despite the difficult market. The company is currently building five neighborhoods in Vancouver and Washougal, Washington as well as Salem and Clackamas, Oregon. Another initiative will be to secure more lots for future development. Wann and his team are already sifting through proposals from financial institutions and developers looking to unload distressed lot inventory.
?I?m excited about the opportunities of the current market in terms of lot availability and affordability. I think we can provide a solution for banks and developers who need to sell inventory,? said Wann.
About Pacific Lifestyle Homes: Pacific Lifestyle Homes is owned locally by Kevin Wann. The company was founded in 1996 and since its inception; the company has built nearly 2000 homes throughout the greater Portland area. Pacific Lifestyle Homes is one of the most celebrated builders in Southwest Washington and Northern Oregon and is a two-time winner of the prestigious "Builder of the Year" award from the Clark County BIA. For more information visit: http://www.pacificlifestylehomes.com/
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