If Scottsdale had a railroad line, Bill Flood said, his rental house would be considered south of the tracks.
As it is, his three-bedroom home southwest of Hayden and McDowell roads is in a neighborhood hit hard by foreclosures over the past few years.
Flood got an eviction notice a few days after a Jan. 6 trustee sale but is fighting to stay in his home of 15 years on East Moreland Street. The home sold for $98,000, said Flood, who attended the trustee sale.
"It was like they stabbed me in the back," he said of the new owner, Patrick Kirker of Perth Development LLC of California.
Flood is among thousands of area renters affected by the housing meltdown. They often are unaware that their landlord is in default on their mortgage until after a foreclosure and a trustee sale.
That's when a new owner knocks on the door or sends a notice to evict them. Flood was aware his rental home had been sold but he believed his lease would protect him.
Rental tenants who are current on their rent have legal protections under the federal Protecting Tenants at Foreclosure Act of 2009.
Flood has a valid lease with former property owner Margret Williams through February 2013, said Robert Nagle, a Phoenix attorney representing Flood.
That gives him the right to stay in the home through the terms of the lease unless the new owner wanted to move into the home. Then Flood would be given 90 days to move out, Nagle said.
Fair-market rent
However, the federal act does not protect a tenant who is a child, parent or spouse of the previous owner. The lease has to be a proper arms-length transaction and the renter must be paying rent that is not substantially below market value.
In this case, the arms-length transaction and fair-market rent is in dispute, said Scottsdale attorney Mark Zinman, representing Perth Development. He declined further comment saying any evidence would be presented in court, unless a settlement can be reached.
Flood and Williams had been domestic partners but now are friends and she looks after Flood's 13 dogs when he is at work as a plumber, Nagle said.
Flood said he paid $500 a month in cash to Williams in rent and did repairs on the 1,200-square-foot home that was built in 1958.
Flood admits that the house is in poor condition with holes in the walls, a leaky roof and only an evaporative cooler that he installed to keep it habitable in the summer.
Forging a settlement
He said he has tried to work with the new owner to move out before the lease expires or pay more rent if they fixed the house up.
"They say the want to gut it, fix it up and rent it out," Flood said. "I think they just want me out."
Flood said he was offered $1,000 to move out within 30 days but it would take him at least 60 days to move all the belongings he has collected after 15 years in the home.
Nagle said there is a middle-ground solution that would be more cost-effective for both parties short of litigation.
Meanwhile, tenant leases are among the complicating risks for investors buying foreclosed property, he said.
"That's why people prefer to buy retail or short-sale homes," Nagle added.
by Peter Corbett - Jan. 27, 2012 08:36 AM The Republic | azcentral.com
Scottsdale renter fights to stay in foreclosed home
Tuesday, January 31, 2012
Thursday, January 19, 2012
Want To Shoot Your Real Estate Agent Or Mortgage Broker Out Of A Cannon?
Failed property transactions in the United Kingdom (UK) have buyers frustrated and Channel Four’s property presenter, Phil Spencer, has launched a Web game that lets buyers vent their anger and potentially win much-needed cash. Angry Buyers invites buyers to fire mortgage managers, property lawyers and other real estate “professionals” out of a cannon at buildings for the chance to win paid rent or mortgage costs for six months. Spencer hopes the game will help ease buyers’ frustrations as well as draw attention to the number of failed transactions – 531,000 – that occurred in the UK in the final months of 2011. For more on this continue reading the following article from Property Wire.
An estimated 531,000 home sales in the UK fell through in the final months of 2011 but now an new online game has been launched where buyers can vent their anger on property professionals by firing them at buildings.
The Angry Buyers game, launched by Channel Four property presenter Phil Spencer, means people who are fed up with estate agents, property lawyers and mortgage brokers can have some fun.
But the game, created by online conveyancers In-Deed.net, also gives people the chance to get their rent or mortgage paid for six months.
It also aims to highlight the sheer number of sales that fall through, often due to poor service and lack of available finance.
‘With more than half a million property deals falling through at the end of last year primarily due to a lack of available mortgage finance it is no surprise buyers are angry. Angry Buyers is a new online game where players can let off steam by firing estate agents and property lawyers out of a cannon for the chance to win their rent or mortgage paid for six months,’ said Spencer.
Research from In-Deed shows that from September to November last year there was a dramatic spike in failed property transactions and suggests that more buyers than ever give up trying through sheer frustration. Some 531,000 sales fell through in these three months compared with 394,000 for the three months from December 2010 to February 2011.
The firm pointed out that in the last six months of 2011 it became more likely that a transaction would fail than succeed and half of buyers lose money when the move falls through, costing them an average of £5,500. As a result the number of buyers who give up after the first try more than doubled across the year.
Difficulties securing mortgage finance is also a key factor, seriously aggravated by declining service standards among property professionals, according to the firm’s research.
Almost a quarter of buyers, some 24%, reported that the vendor couldn’t secure a mortgage to move on, while one in ten, 11%, said that they had the same problem themselves.
Legal issues were the culprit in one in eight cases, 12%, with many reports of incompetence, delays and mistakes by solicitors, 13% and 5% reported anger with the legal profession.
Estate agents were also the target of buyers’ anger with nearly a fifth, 18%, saying that they were upset with the buying agent involved.
‘With mortgage finance harder than ever to secure and poor service standards rife in estate agency and conveyancing, it’s no surprise that home buying is such a frustrating process. You can make it a lot less stressful by using a reputable online conveyancing service,’ said In-Deed chairman and founder of Rightmove, Harry Hill.
by Property Wire Jan 18, 2012
Want To Shoot Your Real Estate Agent Or Mortgage Broker Out Of A Cannon?
An estimated 531,000 home sales in the UK fell through in the final months of 2011 but now an new online game has been launched where buyers can vent their anger on property professionals by firing them at buildings.
The Angry Buyers game, launched by Channel Four property presenter Phil Spencer, means people who are fed up with estate agents, property lawyers and mortgage brokers can have some fun.
But the game, created by online conveyancers In-Deed.net, also gives people the chance to get their rent or mortgage paid for six months.
It also aims to highlight the sheer number of sales that fall through, often due to poor service and lack of available finance.
‘With more than half a million property deals falling through at the end of last year primarily due to a lack of available mortgage finance it is no surprise buyers are angry. Angry Buyers is a new online game where players can let off steam by firing estate agents and property lawyers out of a cannon for the chance to win their rent or mortgage paid for six months,’ said Spencer.
Research from In-Deed shows that from September to November last year there was a dramatic spike in failed property transactions and suggests that more buyers than ever give up trying through sheer frustration. Some 531,000 sales fell through in these three months compared with 394,000 for the three months from December 2010 to February 2011.
The firm pointed out that in the last six months of 2011 it became more likely that a transaction would fail than succeed and half of buyers lose money when the move falls through, costing them an average of £5,500. As a result the number of buyers who give up after the first try more than doubled across the year.
Difficulties securing mortgage finance is also a key factor, seriously aggravated by declining service standards among property professionals, according to the firm’s research.
Almost a quarter of buyers, some 24%, reported that the vendor couldn’t secure a mortgage to move on, while one in ten, 11%, said that they had the same problem themselves.
Legal issues were the culprit in one in eight cases, 12%, with many reports of incompetence, delays and mistakes by solicitors, 13% and 5% reported anger with the legal profession.
Estate agents were also the target of buyers’ anger with nearly a fifth, 18%, saying that they were upset with the buying agent involved.
‘With mortgage finance harder than ever to secure and poor service standards rife in estate agency and conveyancing, it’s no surprise that home buying is such a frustrating process. You can make it a lot less stressful by using a reputable online conveyancing service,’ said In-Deed chairman and founder of Rightmove, Harry Hill.
by Property Wire Jan 18, 2012
Want To Shoot Your Real Estate Agent Or Mortgage Broker Out Of A Cannon?
Housing Market: Here Are 9 Industry Insiders That Think the Rebound Is for Real
David Crowe, chief economist at the National Association of Home Builders (NAHB), has released a bullish forecast regarding the 2012 Housing market.
He estimates new home sales will increase from 304,000 in 2011 to 360,000 in 2012. Additionally, housing starts will increase by 17% to 709k. Single family homes will also increase by 17% to 501k. Total starts will hit 709k. Crowe also anticipates new home sales will significantly increase in 2013,reports CalculatedRisk.
Of course, NAHB's forecast isn't the only one that matters. Analysts from Merrill Lynch, John Burns, Wells Fargo, Goldman Sachs, Moody's, and Fannie Mae have released forecasts of their own.
Using a table from Calculated Risk, we see the forecast range. Merrill Lynch comes in as the least optimistic for New Home Sales in 2012, predicting 304,000. On the other hand, Moody's anticipates 530,000 new home sales.
For single family home starts, Merrill Lynch again comes in as the most pessimistic of the lot at 427k. Moody's is most optimistic at 687k single family starts.
Business section: Investing ideasSo, which housing stocks are worth a closer look?
For ideas, we collected data on insider transactions and identified a list of housing stocks that have seen significant insider buying over the last six months.
Theoretically, insiders know more about their companies than anyone else. So if they're using their own cash to buy the shares of their employers, you better pay close attention.
Insider executives are optimistic on the outlook of these companies. They seem to think the rebound is for real -- do you agree? (Click here to access free, interactive tools to analyze these ideas.)
1. PulteGroup (NYSE: PHM ) : Engages in homebuilding and financial services businesses primarily in the United States. Over the last six months, insiders were net buyers of 93,802 shares, which represents about 0.03% of the company's 336.42M share float.
2. KB Home (NYSE: KBH ) : Operates as a homebuilding and financial services company in the United States. Over the last six months, insiders were net buyers of 36,000 shares, which represents about 0.05% of the company's 65.47M share float.
3. Beazer Homes: Designs, builds, and sells single-family and multi-family homes in the United States. Over the last six months, insiders were net buyers of 88,300 shares, which represents about 0.14% of the company's 62.67M share float.
4. Armstrong World Industries: Engages in the design, manufacture, and sale of flooring products and ceiling systems in the Americas, Europe, and the Pacific Rim. Over the last six months, insiders were net buyers of 16,000 shares, which represents about 0.08% of the company's 20.65M share float.
5. Headwaters (NYSE: HW ) : Provides products, technologies, and services in the building products, construction material, and energy industries primarily in the United States and Canada. Over the last six months, insiders were net buyers of 293,818 shares, which represents about 0.5% of the company's 59.04M share float.
6. Texas Industries: Engages in the production and supply of heavy construction materials in the United States. Over the last six months, insiders were net buyers of 2,744,380 shares, which represents about 20.15% of the company's 13.62M share float.
7. Two Harbors Investment (NYSE: TWO ) : Operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS) and related investments. Over the last six months, insiders were net buyers of 121,000 shares, which represents about 0.09% of the company's 139.68M share float.
8. ARMOUR Residential REIT (NYSE: ARR ) : Over the last six months, insiders were net buyers of 200,000 shares, which represents about 0.25% of the company's 81.27M share float.
9. Campus Crest Communities: Focuses on building, owning, and managing student housing properties in the United States. Over the last six months, insiders were net buyers of 12,525 shares, which represents about 0.04% of the company's 30.58M share float.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
January 18, 2012
Housing Market: Here Are 9 Industry Insiders That Think the Rebound Is for Real
Monday, January 16, 2012
Trade-in program ads get scrutiny - USATODAY.com
A Queen Creek couple looking to get out of an upside-down mortgage and into a brand-new home thought that a "trade-in" program promoted by Fulton Homes could be the answer.
On billboards, radio and Internet advertisements, Fulton Homes offers prospective customers a chance to trade existing homes for new ones.
"Why stay in an old home when you can trade up to an energy efficient Fulton Home?" the company's website asks in a prominently displayed promotion.
But after making inquiries and listening to pitches, Stanell and Jonathan Fylling said the trade-in program appeared to be more of a marketing gimmick that seemed to offer little help to homeowners.
Instead of trading their home for a new one, the Fyllings said they would have been left holding two mortgages for a couple of years and then faced with the possibility of letting their old house go into foreclosure.
"I don't see how they can get away with saying it is a trade-in program," Stanell Fylling said.
Executives with Tempe-based Fulton Homes defend the program, saying it has helped dozens of homeowners get out of old homes and into new ones.
"We've never tried to mislead anybody," said Dennis Webb, Fulton vice president of operations. "What we are trying to do is just make friends."
Many of the Phoenix area's biggest homebuilders participate in the program, which targets potential customers' inability to sell their homes, often because they owe much more on their mortgages than their homes are worth. They can get help with leasing or selling their existing homes and are offered reduced management fees or real-estate commissions. But reporters for The Arizona Republic and 12 News' "Call 12 for Action" found that few builders have created marketing campaigns around it because of concerns that consumers might get the wrong impression.
"We don't market it heavily for the very reason that Fulton is getting pushback," said Pierrette Tierney, vice president of sales and marketing for Taylor Morrison Homes. "For us, it is more of an extra tool in our belt."
Tierney said her company's sales staff has been trained on the program. She said they advise customers on an individual basis "as opposed to putting it up on a billboard."
Locally and nationally, the housing market has cratered in the past few years, leaving homebuilders searching for innovative ways to find buyers. Homebuilders went from selling 60,000 homes a year in the Greater Phoenix market five years ago to about 7,200 this year.
Despite a Chapter 11 bankruptcy reorganization, Fulton Homes has been one of the most successful homebuilders in metro Phoenix in 2011, averaging 4.8 sales per subdivision per month, compared with the local industry average of about 1.5 sales.
Webb said that through the trade-in program, Fulton has bought homes outright from customers, leased out their existing homes for up to three years with no management fees and offered steep discounts on real-estate agent commissions.
Fulton Homes representative John Mecham of Knoodle Public Relations said the program works in similar fashion to trading in a used car.
But unlike with used-car trade-ins, where customers often owe more on their cars than they are worth, old-home mortgages cannot be rolled into new-home loans.
"You can't roll a deficit loan amount into a new home loan. Real-estate laws prohibit that," Webb said, adding that underwriters typically can't approve mortgage loans that are greater than the home's appraisal value.
Old for new?
A used-car trade-in was the scenario that the Fyllings said they envisioned when they heard Fulton's radio ads about the trade-in program. They said they grew hopeful about getting out of their 2,200-square-foot home and moving to a larger Fulton home in Gilbert.
Stanell, 28, a hairstylist, and Jonathan, a pipe fitter, said they owe about $33,000 more than their home's current value.
Stanell said she went on Fulton's website, began looking at different communities and floor plans and then called. She said a Fulton representative immediately transferred her to an independent real-estate agent who provided very little information on the trade-in program.
Stanell said she was questioned about her home's value, condition, size and mortgage. Before talking about trades, the agent insisted on sending someone to their home.
About five minutes after the agent arrived, Stanell said, she began thinking that she had been misled about the trade-in program. Her first surprise was that the agent wasn't exclusively representing Fulton Homes and showed her listings for homes both old and new in communities throughout the Valley. Then came the options.
According to Stanell, the agent suggested leasing their existing house. He said the company could guarantee a lease for up to five years with a reduced management fee.
Stanell acknowledged that leasing might allow them to qualify for a second mortgage, but then she and her husband would have two homes to worry about. And what happens when the lease ends, she asked: A short sale? Foreclosure?
Stanell said she felt as if neither Fulton Homes nor the agent seemed concerned so long as they sold a home. She said the agent offered nothing that she couldn't do on her own. After a back-and-forth exchange, Stanell said, the agent acknowledged that the trade-in program was "a marketing tool."
Fulton Homes officials deny the program is any kind of marketing ploy. The agent, who works with Keller Williams and Rider Elite, denied to Fulton that he made such a claim to the Fyllings.
On its website, Rider Elite promotes the trade-in program and lists 19 builders that participate. The website offers answers to questions about foreclosures, short sales and negative equity.
"We can help you trade-in your home," an advertisement on the site states.
Brent Anderson, vice president of investor relations at Meritage Homes Corp., said his company has never marketed the program.
"We don't call it, in any of our communities that use it … a trade-in program," he said. "That could be misleading."
Anderson said the program offers little that a traditional real-estate agent doesn't offer, although Meritage has referred customers to it on certain occasions.
"It is more of a listing service," he said of the program. "That is the way it is referred to."
A common approach
Although Fulton just recently built a marketing campaign around the trade-in program, Webb said the trade-in program has existed for several years. Webb said the involvement of other builders gives customers flexibility, so they aren't locked into a single builder's offerings.
Chandler homeowner Jason Crespo said he is a satisfied customer of the Fulton Homes trade-in program.
Crespo, 43, an insurance agent, said he and his wife used the program to move out of their home in Chandler Heights and help his mother sell her home in Sun Lakes. He said that they all were able to move into a 4,167-square-foot Fulton Home that is bigger than their two older homes combined.
"It was our dream to build our new house, the way we wanted," he said. "But I never thought I was going to hand them the keys to my old house and they were going to hand me the keys to a new one."
Crespo said his mother, who owed nothing on her home, was able to sell it outright using an agent who worked on a reduced commission. For his home, Fulton agreed to a guaranteed two-year lease with no management fee.
Crespo described himself as a cautious consumer who looked carefully at the possibilities before agreeing to become involved. He said that he never expected the program to work like buying a new car.
"I think (Fulton) tries to help you buy a house," he said. "I do feel like we get a good deal. There were many advantages that I saw."
But Crespo also acknowledged that his deal doesn't fit the typical definition of trade.
"Did I do anything to trade? Probably not," he said. "Would I have bought a home from Fulton if they didn't have (the trade-in) program? Probably."
By Robert Anglen, The Arizona RepublicPosted 12/20/2011 04:11:14 AM
Trade-in program ads get scrutiny - USATODAY.com
On billboards, radio and Internet advertisements, Fulton Homes offers prospective customers a chance to trade existing homes for new ones.
"Why stay in an old home when you can trade up to an energy efficient Fulton Home?" the company's website asks in a prominently displayed promotion.
But after making inquiries and listening to pitches, Stanell and Jonathan Fylling said the trade-in program appeared to be more of a marketing gimmick that seemed to offer little help to homeowners.
Instead of trading their home for a new one, the Fyllings said they would have been left holding two mortgages for a couple of years and then faced with the possibility of letting their old house go into foreclosure.
"I don't see how they can get away with saying it is a trade-in program," Stanell Fylling said.
Executives with Tempe-based Fulton Homes defend the program, saying it has helped dozens of homeowners get out of old homes and into new ones.
"We've never tried to mislead anybody," said Dennis Webb, Fulton vice president of operations. "What we are trying to do is just make friends."
Many of the Phoenix area's biggest homebuilders participate in the program, which targets potential customers' inability to sell their homes, often because they owe much more on their mortgages than their homes are worth. They can get help with leasing or selling their existing homes and are offered reduced management fees or real-estate commissions. But reporters for The Arizona Republic and 12 News' "Call 12 for Action" found that few builders have created marketing campaigns around it because of concerns that consumers might get the wrong impression.
"We don't market it heavily for the very reason that Fulton is getting pushback," said Pierrette Tierney, vice president of sales and marketing for Taylor Morrison Homes. "For us, it is more of an extra tool in our belt."
Tierney said her company's sales staff has been trained on the program. She said they advise customers on an individual basis "as opposed to putting it up on a billboard."
Locally and nationally, the housing market has cratered in the past few years, leaving homebuilders searching for innovative ways to find buyers. Homebuilders went from selling 60,000 homes a year in the Greater Phoenix market five years ago to about 7,200 this year.
Despite a Chapter 11 bankruptcy reorganization, Fulton Homes has been one of the most successful homebuilders in metro Phoenix in 2011, averaging 4.8 sales per subdivision per month, compared with the local industry average of about 1.5 sales.
Webb said that through the trade-in program, Fulton has bought homes outright from customers, leased out their existing homes for up to three years with no management fees and offered steep discounts on real-estate agent commissions.
Fulton Homes representative John Mecham of Knoodle Public Relations said the program works in similar fashion to trading in a used car.
But unlike with used-car trade-ins, where customers often owe more on their cars than they are worth, old-home mortgages cannot be rolled into new-home loans.
"You can't roll a deficit loan amount into a new home loan. Real-estate laws prohibit that," Webb said, adding that underwriters typically can't approve mortgage loans that are greater than the home's appraisal value.
Old for new?
A used-car trade-in was the scenario that the Fyllings said they envisioned when they heard Fulton's radio ads about the trade-in program. They said they grew hopeful about getting out of their 2,200-square-foot home and moving to a larger Fulton home in Gilbert.
Stanell, 28, a hairstylist, and Jonathan, a pipe fitter, said they owe about $33,000 more than their home's current value.
Stanell said she went on Fulton's website, began looking at different communities and floor plans and then called. She said a Fulton representative immediately transferred her to an independent real-estate agent who provided very little information on the trade-in program.
Stanell said she was questioned about her home's value, condition, size and mortgage. Before talking about trades, the agent insisted on sending someone to their home.
About five minutes after the agent arrived, Stanell said, she began thinking that she had been misled about the trade-in program. Her first surprise was that the agent wasn't exclusively representing Fulton Homes and showed her listings for homes both old and new in communities throughout the Valley. Then came the options.
According to Stanell, the agent suggested leasing their existing house. He said the company could guarantee a lease for up to five years with a reduced management fee.
Stanell acknowledged that leasing might allow them to qualify for a second mortgage, but then she and her husband would have two homes to worry about. And what happens when the lease ends, she asked: A short sale? Foreclosure?
Stanell said she felt as if neither Fulton Homes nor the agent seemed concerned so long as they sold a home. She said the agent offered nothing that she couldn't do on her own. After a back-and-forth exchange, Stanell said, the agent acknowledged that the trade-in program was "a marketing tool."
Fulton Homes officials deny the program is any kind of marketing ploy. The agent, who works with Keller Williams and Rider Elite, denied to Fulton that he made such a claim to the Fyllings.
On its website, Rider Elite promotes the trade-in program and lists 19 builders that participate. The website offers answers to questions about foreclosures, short sales and negative equity.
"We can help you trade-in your home," an advertisement on the site states.
Brent Anderson, vice president of investor relations at Meritage Homes Corp., said his company has never marketed the program.
"We don't call it, in any of our communities that use it … a trade-in program," he said. "That could be misleading."
Anderson said the program offers little that a traditional real-estate agent doesn't offer, although Meritage has referred customers to it on certain occasions.
"It is more of a listing service," he said of the program. "That is the way it is referred to."
A common approach
Although Fulton just recently built a marketing campaign around the trade-in program, Webb said the trade-in program has existed for several years. Webb said the involvement of other builders gives customers flexibility, so they aren't locked into a single builder's offerings.
Chandler homeowner Jason Crespo said he is a satisfied customer of the Fulton Homes trade-in program.
Crespo, 43, an insurance agent, said he and his wife used the program to move out of their home in Chandler Heights and help his mother sell her home in Sun Lakes. He said that they all were able to move into a 4,167-square-foot Fulton Home that is bigger than their two older homes combined.
"It was our dream to build our new house, the way we wanted," he said. "But I never thought I was going to hand them the keys to my old house and they were going to hand me the keys to a new one."
Crespo said his mother, who owed nothing on her home, was able to sell it outright using an agent who worked on a reduced commission. For his home, Fulton agreed to a guaranteed two-year lease with no management fee.
Crespo described himself as a cautious consumer who looked carefully at the possibilities before agreeing to become involved. He said that he never expected the program to work like buying a new car.
"I think (Fulton) tries to help you buy a house," he said. "I do feel like we get a good deal. There were many advantages that I saw."
But Crespo also acknowledged that his deal doesn't fit the typical definition of trade.
"Did I do anything to trade? Probably not," he said. "Would I have bought a home from Fulton if they didn't have (the trade-in) program? Probably."
By Robert Anglen, The Arizona RepublicPosted 12/20/2011 04:11:14 AM
Trade-in program ads get scrutiny - USATODAY.com
Danny's Family Chapter 11 finalized
A judge has approved the bankruptcy reorganization plan for a group of car washes, restaurants, gas stations and convenience stores owned by Scottsdale-based Danny's Family Cos., and for its founder and CEO, Daniel "Danny" Hendon.
According to documents filed in U.S. Bankruptcy Court for the District of Arizona, Judge Eileen Hollowell approved the Chapter 11 reorganization plan on Friday.
The plan establishes a five-year schedule for the repayment of lenders, car-wash vendors and suppliers, and other creditors by 20 affiliate businesses of Danny's.
The judge's approval also settles Hendon's personal bankruptcy.
Under the approved plan, Hendon will be allowed to keep his Paradise Valley home, but for a period of five years, he is required to hand over a monthly amount the court has determined to be his disposable income.
Dennis Naughton, general counsel of Danny's Family Cos., said Hendon's former second home, in Corona Del Mar, Calif., had been repossessed by Hendon's mortgage lender.
The Danny's affiliates filed for Chapter 11 bankruptcy in February and March 2010.
Hendon submitted his own Chapter 11 petition to the court on July 25, listing more than $317 million in personal liabilities.
Those included a $250 million claim by the state related to a September 2009 lawsuit. A land-development firm in which Hendon was involved and the Arizona State Land Department filed cross-claims against each other over a 2007 state-trust-land deal gone bad in the Desert Ridge area.
In February 2010, four creditors filed lawsuits against Hendon, who also is a developer, along with his business partners and their various companies, claiming a total debt of more than $50 million.
Naughton said the rapid-fire legal action was part of a domino effect that had started after one lender, Milwaukee-based M&I Marshall & Ilsley Bank, filed a Maricopa County Superior Court complaint, claiming non-payment on a $13.8 million business loan.
Another, larger lawsuit was filed in March 2010 by Dallas-based Comerica Bank, contending that Hendon and 19 of his companies defaulted on a $40 million loan, with an outstanding balance of $24.7 million.
Representatives of Danny's, a major Arizona employer for more than 25 years counting more than 1,000 workers, have said the effects of Arizona's weak economy have hurt retail sales at its car-wash, gas-station and convenience-store operations.
Since filing for reorganization, Danny's has undergone restructuring to improve its profit-making ability and long-term outlook, Hendon said.
"When this process began, we made a commitment to our employees, our creditors and our community that we would make every possible effort to weather the storm," he said in a written statement.
"We have had to make some very difficult decisions over the past year and a half to honor that commitment."
Hendon described the bankruptcy experience as "humbling" but said he and the company were ready to put it behind them and get back to business.
"I am especially proud that Danny's is able to pay our car wash vendors and suppliers 100 percent of what is owed to them," he said.
by J. Craig Anderson The Arizona Republic Dec. 19, 2011 05:56 PM
Danny's Family Chapter 11 finalized
According to documents filed in U.S. Bankruptcy Court for the District of Arizona, Judge Eileen Hollowell approved the Chapter 11 reorganization plan on Friday.
The plan establishes a five-year schedule for the repayment of lenders, car-wash vendors and suppliers, and other creditors by 20 affiliate businesses of Danny's.
The judge's approval also settles Hendon's personal bankruptcy.
Under the approved plan, Hendon will be allowed to keep his Paradise Valley home, but for a period of five years, he is required to hand over a monthly amount the court has determined to be his disposable income.
Dennis Naughton, general counsel of Danny's Family Cos., said Hendon's former second home, in Corona Del Mar, Calif., had been repossessed by Hendon's mortgage lender.
The Danny's affiliates filed for Chapter 11 bankruptcy in February and March 2010.
Hendon submitted his own Chapter 11 petition to the court on July 25, listing more than $317 million in personal liabilities.
Those included a $250 million claim by the state related to a September 2009 lawsuit. A land-development firm in which Hendon was involved and the Arizona State Land Department filed cross-claims against each other over a 2007 state-trust-land deal gone bad in the Desert Ridge area.
In February 2010, four creditors filed lawsuits against Hendon, who also is a developer, along with his business partners and their various companies, claiming a total debt of more than $50 million.
Naughton said the rapid-fire legal action was part of a domino effect that had started after one lender, Milwaukee-based M&I Marshall & Ilsley Bank, filed a Maricopa County Superior Court complaint, claiming non-payment on a $13.8 million business loan.
Another, larger lawsuit was filed in March 2010 by Dallas-based Comerica Bank, contending that Hendon and 19 of his companies defaulted on a $40 million loan, with an outstanding balance of $24.7 million.
Representatives of Danny's, a major Arizona employer for more than 25 years counting more than 1,000 workers, have said the effects of Arizona's weak economy have hurt retail sales at its car-wash, gas-station and convenience-store operations.
Since filing for reorganization, Danny's has undergone restructuring to improve its profit-making ability and long-term outlook, Hendon said.
"When this process began, we made a commitment to our employees, our creditors and our community that we would make every possible effort to weather the storm," he said in a written statement.
"We have had to make some very difficult decisions over the past year and a half to honor that commitment."
Hendon described the bankruptcy experience as "humbling" but said he and the company were ready to put it behind them and get back to business.
"I am especially proud that Danny's is able to pay our car wash vendors and suppliers 100 percent of what is owed to them," he said.
by J. Craig Anderson The Arizona Republic Dec. 19, 2011 05:56 PM
Danny's Family Chapter 11 finalized
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