EAST BRUNSWICK, NJ-Luxury homebuilder Kara Homes, based here, late last week filed for Chapter 11 protection, with company officials citing slowed sales for the company's financial woes. The company reported $288 million in sales in 2005.
In the 344-page petition filed with the US Bankruptcy Court, District of New Jersey, a copy of which was obtained by GlobeSt.com, the company listed just less than $350.2 million in assets and a little more than $296.8 million in liabilities. Some $248 million of those liabilities are construction loans from various banks. Most of the rest is money owed to contractors and suppliers. Some of the largest unsecured creditors include RWZ Stairs & Rails Inc. of Lakewood, Benchmark Inc., also of Lakewood, and J. Wright Construction Inc. of Toms River.
According to information released by David Bruck of the law firm of Greenbaum, Rowe, Smith & Davis of Woodbridge, Kara Homes' bankruptcy attorney, who cited economic conditions and a slowdown in housing sales, the company has laid off 100 of its 170 employees. The company also intends to get financing to complete projects under development, according to Bruck, and expects to seek buyers for several projects in the early stages of development. Company officials could not be reached for further comment.
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