Village Homes files for bankruptcy protection

DENVER - Greenwood Village-based Village Homes has filed for Chapter 11 bankruptcy protection.

Company management stresses that it will be business as usual for the time being and homebuyers and current homeowners should not notice any difference.

Village Homes of Colorado is currently active in 12 communities across the state. Cheryl Schuette, president of Village Homes, says the downturn in the housing market combined with the tight credit markets made it impossible to survive without filing Chapter 11 protection.

"The intent in going that direction was to provide the best opportunities for us to deliver homes for people who are under contract with us and intend to close on their Village Home and to take care of all those homebuyers who are under warranty with Village Homes going forward," said Matt Osborn, senior vice president of home building.

Schuette went on to say that she's confident the company will be able to secure Debtor in Possession Financing as part of the bankruptcy process and that Colorado's housing market will continue to improve.

In a prepared statement, Schuette stated, "during Village Homes nearly 25 year history, we have successfully managed through challenging economic cycles. We are using the Chapter 11 process as a tool that enables us to continue normal operations while we restructure our capital. Our goal is to emerge from the process as a stronger, healthier and more efficient company that will be newly positioned for success."

No further staff reductions are expected at this time since Village Homes had already downsized prior to Friday's announcement.

"This process allows us to operate and function as we have for the 25 years," said Osborn. "This process really allows us to look out for all the stake holders of Village Homes, including our customers who live in their homes, our potential customers, and all their trades and vendors and our employee team."

For more information regarding Village Homes' reorganization, visit Village Homes Web site at www.villagehomes.com.

Those in the industry say it was a good move.

"I do think they'll come out stronger than ever. I think it's a little naive to think that this economic times hasn't also affected home builders as it has mortgage brokers and the typical consumer in this market," said Barb Riley, a Realtor with Remax.

Riley says those who have home contracts through Village Homes may want to consult an attorney to make sure they understand what happens next.

"Specifically, where this affects the consumer is, if their home is sold, they're waiting for closing and in a month or two, Chapter 11 could take conceivably longer to resolve," she said.