Another longtime Las Vegas valley company, Rhodes Homes, filed for bankruptcy protection. For now, the developer says it will remain business as usual at its construction and home sale sites.
Rhodes filed for Chapter 11 relief Tuesday after failing to make its latest payment on a $500 million line of credit.
With more than 20 years of experience and 7,000 homes built in the valley, Rhodes Homes admits they have been hit so hard by the economic recession in Las Vegas that the company needs to reorganize its own house if they're going to survive.
The sights and sounds of construction can still be found at the latest Rhodes Homes development in the far southwest end of the valley.
Rhodes Ranch homeowner Donald Mailloux has nothing but praise for the company that built his golf-course home a year and a half ago, "Customer service here is great. If you have a problem with your home, they are immediately on it."
But now that Rhodes has filed for Chapter 11 protection, Mailloux is counting on the developer's reputation and 20 year track record in the market, "That's what brought us to Rhodes Ranch in the first place."
Rhodes is the latest in a growing line of valley companies to file for Chapter 11 relief, in an effort to renegotiate debt they can no longer manage.
Company owner and founder James Rhodes was not available to comment, but in a written statement said, "The economic crisis affecting Las Vegas, along with the inability to secure alternative and cost-effective financing, has hurt homebuilders harder than any other industry, particularly independent companies such as ours."
UNLV law professor Keith Rowley explains, in general terms, that Chapter 11 is not the same death blow that a Chapter 7 liquidation is.
"We're talking about a company or entity that thinks it can reorganize and can continue to do business," he said. "It's just this debt payment that's hanging over their heads."
As this financial reorganization proceeds, Rhodes Homes says it anticipates there will be little impact on the day-to-day operations of the company, that includes its home sales, home construction, and customer service.
