Another Builder Files for Chapter 11 ~ Fulton Homes in Tempe, Arizona

Another builder files for Chapter 11, and this time it's one of the largest builders in Arizona - Fulton Homes.  They are reportedly building and selling homes in 21 subdivisions in and around the greater Phoenix area, including the following in the East Valley:

• In Chandler: Aegean Cove at Fulton Ranch, Gallery at Fulton Ranch, the Island at Fulton Ranch, Classics at Geneva Estates.
  
• In Gilbert: Caribbean at Freeman Farms, Mediterranean at Freeman Farms, Classics at Freeman Farms, Sonoma at Freeman Farms.
  
• In Queen Creek: Heritage at Cortina, Paradise at Ironwood Crossing, Mediterranean at Ironwood Crossing, Caribbean at Ironwood Crossing.

The bad news is that another builder has had to seek protection from its creditors. 

The good news is that Chapter 11 will allow them an opportunity to work a court-supervised reorganization plan, to seek outside capital funds for cash flow, and to basically give them a fighting chance to survive, dig their way out of a financial hole and otherwise come back strong.

Some of the more difficult questions that are yet to be answered are things like:

• What will happen to buyer's "escrow" funds that are being held by Fulton?  From this point forward, all new contracts and earnest monies must be held in a third party account, but what will happen to clients' funds whose houses are still under construction?
• What will happen to the Homeowners Associations (HOA's) funds, operations and management that have not yet been turned over to the homeowners in unfinished developments?
• What will happen to their unsold vacant lots in subdivisions where the HOA has been handed over to the homeowners?  Will Fulton continue to maintain those lots and/or pay the HOA's fees, or will the remaining homeowners have to bear the brunt?

These, and many others like them, are issues/dilemmas that will be raised and addressed over the course of the next months, and perhaps years.  Stay tuned, folks.  It should be interesting!

Arizona Homes - Chandler Homes - Gilbert Homes - Mesa Homes - Queen Creek Homes