Tempe Company Files Bankruptcy
Fulton Homes Files Chapter 11
Bankruptcy is assisting Arizona’s largest home builder, Fulton Homes Corp., filed for Chapter 11 bankruptcy. Sometimes even the most stable appearing companies get themselves into dire financial straights and need a bailout. One of the many benefits of a Chapter 11 bankruptcy is the allowance of a business to re-structure while continuing to conduct business.
Fulton homes is a family-owned corporation based out of Tempe, Arizona. It has long been a staple in the house building community in Arizona. The CEO of Fulton Homes, Douglas Fulton, stated in a press release that there would be no change in customer service. Fulton also indicated that the business would operate normally, despite the bankruptcy filing.
Fulton Homes is one of the largest home builders based in Arizona. It currently promotes 21 subdivisions and sells new homes across the entire state. Two of the 21 subdivision communities are located in the Cobblestone Farms development in Maricopa County, Arizona. Among the numerous communities across the East Valley; include Freeman Farms in Gilbert, and Fulton Ranch in Chandler.
Ira Fulton is the company’s founder. Ira is famous for his philanthropy in Arizona. He has been named by Business Week Magazine as one of the nations most generous philanthropists (along with the likes of Oprah Winfrey, Warren Buffet, and Bill Gates). Ira has contributed millions of dollars to Arizona State University and other colleges. Ira Fulton grew Fulton Homes from a small construction company to one of the most profitable and largest home builders not just in Arizona but in the nation.
The Chapter 11 filing by Fulton Homes, proposes a plan of debt reorganization so they can remain in business and pay back creditors over time. Fulton struggled to keep up with debt payments as they seem to have over-extended themselves. This mismanagement though unfortunate, will be bailed out through the AZ bankruptcy filing.
Ira Fulton founded Fulton Homes 35 years ago. Doug Fulton is the company’s president and Ira’s son. According to court documents, Fulton Homes owes $100 million – $500 million to several different creditors. Typically, companies that file Chapter 11 bankruptcy protection under the United States Bankruptcy Code stay in business and continue to operate while the court resolves the debt issues and reviews creditor claims. This will be the case for the Arizona construction company.
Filing Chapter 11 bankruptcy no doubt may create new challenges in securing credit from future lenders to build homes. Filing for bankruptcy in the eyes of creditors shows a weakness in financial stability. Prior bankruptcy filings may lead to higher interest on lines of credit or flat out denial of additional financial support.
Fulton took out 61 building permits for single-family homes last year. It is not known how many spec homes Fulton has on its books. The financial situation facing Fulton is most likely a result of the problems facing the Valley’s housing market. Like most builders in Arizona, Fulton bought land and built houses based on the housing boom and demand, but sales and construction have slowed.
Financial problems in AZ can strike even the most well established companies. Individuals and families in Maricopa, Pima, and Pinal counties can find themselves in need of debt relief even after taking precautionary measures. If you find yourself in the same boat as Fulton Homes and need a bailout, make sure to seek the assistance of a professional debt relief expert.
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