Orleans Plans Bankruptcy Exit

Orleans Homebuilders plans to be out of bankruptcy reorganization before year-end 2010, the company reported Wednesday. A bankruptcy court judge has signed off on Orleans' disclosure plan, sending its reorganization plan off to creditors for a vote. A hearing for the court's approval of the plan is set for Nov. 16. If approved, the company would emerge with less than $200 million in debt, down from more than $500 million at the time of the filing on March 1. Orleans has the approval of its main creditors, including the unsecured creditors' committee, boosting executives' confidence that the approval process will go smoothly. "All the parties have worked closely and collaboratively, and we are very pleased to present a consensual plan of reorganization for creditor consideration," Mitchell B. Arden, who has been serving as Orleans' chief restructuring officer, said in a statement. Arden is senor managing director and shareholder of Phoenix Management, the turnaround specialist the company hired to handle the restructuring. When Orleans filed for bankruptcy court protection from creditors under Chapter 11, its original plan was to auction off the company's assets, effectively closing the 90-year-old company. NVR was the "stalking-horse bidder" for the Bensalem, Pa.-based builder's holdings, setting a starting bid of $170 million for 4,300 lots in 11 divisions in eight states. However those plans changed rapidly in May when Orleans' senior-debt holders decided to reconstitute rather than dissolve the company, offering to support keeping the company alive.

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