Judge allows Antioch land sale
A judge has set a May date to auction Antioch property left fallow when suburban mega-builder Neumann Homes Inc. filed for bankruptcy in November.
U.S. Bankruptcy Judge Eugene R. Wedoff in Chicago on Wednesday signed off on a deal to allow Warrenville-based Neumann Homes and its creditor Cole Taylor Bank to liquidate the unfinished Clublands development in the village of Antioch.
A sale is set to take place on May 14 and, if successful, development at the site could take place later this year.
"Suffice to say, Clublands is being sold," said Barry A. Chatz, an attorney representing Cole Taylor Bank. "We're working with the debtor to maximize value for everyone's benefit."
Wedoff will oversee both the bids and the sale of the Clublands development.
Cole Taylor is one of eight lenders to which Neumann owed money when the company filed for Chapter 11 protection. The bank is hoping to recoup some of the $14.4 million it loaned the developer for Clublands.
The deal to auction Clublands was forged through the creation of a new company, called Newco, which allows the Clublands development to be separated from Neumann's other real property tied up in the bankruptcy proceedings, said George N. Panagakis, Neumann's attorney.
Newco was needed because it is unclear how other lenders, which include Bank of America, Guaranty Bank and IndyMac Bank, will attempt to resolve their debt issues related to the remaining real property, he said.
"This is the simplest way to further the Clublands sale process," Panagakis said. "At the end of the day, this is a very, very good thing for Neumann Homes Inc., for the residents of Antioch, and for Cole Taylor Bank to get this into the hands of a developer who could make things happen."
At the time of its filing, Neumann stated it had 22 active development projects, 15 of which are located in Illinois, four in Colorado and three in Wisconsin. The company has indicated it intends to sell off its land assets and scale back its homebuilding activities to meet its debt obligations.
Neumann Homes owes at least $235.6 million to creditors, contractors and material vendors, according to its court filings. The company has shuttered its sales, production and customer service offices and laid off all but nine employees to make good on its debts.
Neumann was the largest developer in Antioch, and had built about half the planned 1,400 largely single-family homes in two village subdivisions. The New Haven subdivision was largely completed, while Clublands was untouched.
Antioch's attorney Lawrence R. Moelman of Hinshaw and Culbertson LLP called the creation of Newco "unusual," but said he was pleased the Clublands estate sale will move forward.
"We are now comfortable with this," Moelman said.