Wednesday, October 15, 2008

Pacific Lifestyle Homes files for bankruptcy

From the Portland Business Journal:

The meltdown of the housing market has forced another home builder to file Chapter 11 bankruptcy.
Pacific Lifestyle Homes Inc. CEO Kevin Wann said Wednesday that a Chapter 11 voluntary reorganization will help the company restructure capital and reorganize its finances.
Vancouver-based Pacific Lifestyle Homes, founded in 1996, will finish the homes it is building in 10 communities across the region.
Wann cited tightening credit markets and the inability of buyers to secure home mortgages as the “biggest factors” in the company’s downturn.
“By filing for voluntary reorganization we are preserving our ability to stay in business and continue to serve our customers,” said Wann.
The company was the sixth-largest home builder last year as ranked by the Portland Business Journal, with a total value of $64.6 million in inventory.
The company built 251 homes last year, well below the record 350 it sold during the market’s peak in 2005.
It plans to close on just 125 homes this year.
Pacific Lifestyle Homes has approximately $56 million in bank debt. It stopped paying its subcontractors in the past 60 days.

If all goes as planned, the company hopes to exit bankruptcy next summer. It will continue building new homes in the meantime, with plans for 110 in 2009.