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Tuesday, October 23, 2007

Neumann Homes prepares bankruptcy filing

by Calculated Risk on 10/23/2007 12:42:00 PM

From the Chicago Tribune: Chicago builder, Neumann Homes, closes branches, prepares bankruptcy filing (hat tip Lyle)

Neumann Homes, one of Chicago's largest homebuilders, announced on Monday that it intends to file for bankruptcy.
The company, ranked among the top 10 in Chicago, also builds in Wisconsin and Colorado. Company CEO Kenneth P. Neumann said in the statement that "significant downturn in the Detroit, Chicago and Denver housing markets resulted in this situation. ... Even after the significant help we have received from our lenders this year, the company can no longer weather this storm."
Homebuilders bankruptcies will probably become common (someone will have to start a home builder implode-o-meter), but also note the comment "... significant help we have received from our lenders". Eventually lenders will start giving up on homebuilders, and this means more builder bankruptcies, and more write downs for the lenders.