One of Oregon’s larges home builders, Legend Homes, has filed for Chapter 11 bankruptcy.
Under the name Legend Homes/Matrix Development, the builder filed for bankruptcy protection at the Portland, Ore., United States District Court yesterday, following a drop-off in home sales and a poor return on land investments in the region.
The primary reason for the filing, according to a statement from the company, was to protect the company’s home building operations from margin calls on land holdings by lenders. Margin calls result when properties drop in value, pushing loan ratios beyond the terms of the original loan.
“Because of recent issues related to the national credit crisis, we understand the need of our financial partners to stay viable and also stay within federal mandates. Yet we had to make this necessary move to protect our interests,” said Legend Homes' president Jim Chapman in a statement.
The company has yet to receive court approval of its bankruptcy plan, but the builder expects to emerge from bankruptcy “by year end.”