Wednesday, May 7, 2008

Village Green files for bankruptcy

43-home subdivision to continue despite $13 million in outstanding debt

Express Staff Writer

One of the Wood River Valley's largest new developments has filed for Chapter 11 bankruptcy.

The Village Green at the Valley Club, a high-end subdivision and golf course north of Hailey, made the bankruptcy filing under the name of Valley Club Homes LLC on Tuesday, April 29, in Twin Falls.

"I'm not ending anything," said Ketchum developer Henry Dean. "I'm not a quitter, and I'm not quitting."

Dean explained that the Chapter 11 bankruptcy filing will prevent his lender, Cal National, from foreclosing on the project. The two-year term loan was paid down substantially, from $21 million to $13 million, Dean said, "but they are unwilling to work with us. They refuse to understand how difficult our fire was last year and the impact that had on our community."

Village Green was approved by the Blaine County Commission in spring 2005. It includes a nine-hole Tom Fazio golf course and construction of 43 custom homes, valued at about $3 million each. So far, however, only 13 homes have been built and only seven have been sold.

"I had to prevent them from foreclosing," Dean said. "I put it into a Chapter 11, which does that. The Village Green is very much alive and very strong and financially strong. I can't emphasize more strongly that the only reason this filing occurred is because Cal National would not cooperate."

Dean further explained that under bankruptcy laws, Valley Club Homes LLC is now described as a "debtor in possession."

"We continue to operate just as we always have," he said. "Monthly we report to the court as to our activity. Other than that we just continue to perform as we always have: homes being sold, the grass being mowed."

Dean said the bankruptcy filing means that the court, in effect, protects the asset. Cal National can file a motion asking for a leave of the bankruptcy filing. Dean declined to predict what the bank would do, and a telephone inquiry to Cal National was not returned by press deadline Tuesday.

"Right now I'm going to get on with my project," Dean said. "The snow has melted. I want to get some new starts and some new sales. The fire is behind us."

Moreover, Dean emphasized that the bankruptcy filing by his LLC, Valley Club Homes, has nothing to do with The Valley Club.

"The nine-hole Tom Fazio course is completed. The $5 million fitness center is completed. The clubhouse is being remodeled. The Valley Club is very, very happy, (in) very good shape. And I hope nobody has confusion between Village Green and the golf club, because they're separate entities."

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