Gemcraft Homes emerges from Chapter 11 bankruptcy

The U.S. Bankruptcy Court in Baltimore Wednesday, Sept. 27, approved the go-forward plan of reorganization submitted by Gemcraft Homes.

In less than one year since filing for Chapter 11 bankruptcy protection, the Gemcraft team led by Bill Luther, CEO, has meticulously structured a blueprint to successfully take Gemcraft Homes into the future. Like many homebuilders, Gemcraft Homes was confronted with the worst housing market in history, and it became necessary for its survival to lessen the company’s land debt.

The reorganization process began by assembling professionals and consultants. “Piece by piece, like a complex puzzle, we were able to address each issue and challenge and get each interested party to enthusiastically support our restructuring plan,” said Luther. Gemcraft Homes negotiated deals with Regions Bank and M&T Bank, and other institutions to secure more than $70 million in new financing to continue its building and development operations. During the reorganization process, both banks collectively supplied $30 million in debtor-in-possession financing, so normal day-to-day business operations of the company could continue and there was no effect on Gemcraft’s customers.

Gemcraft also had the vast majority of its suppliers and contractors supporting and agreeing to move forward together in this strategy for success. “We are humbled and thankful to our trade partners that have stuck with us through this intricate process, and we will do our best to continue earning their support and trust,” said Luther.

With the challenges of reorganization and the current tough homebuilding market, the company expects 2010 settlements to be more than 300 homes with gross sales exceeding $80 million. Cumulatively, dollar revenues since the company’s inception are closing in on the $2 billion mark.

“We are enthusiastic about moving forward with the next successful chapter of our company’s history,” said Luther. “We have enjoyed and are honored to have built over 6,700 homes for Gemcraft Homes’ families and we look forward to building the next 6,700 homes.”