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NEW YORK CITY-A federal judge has scheduled a first-day hearing for Wednesday in the Chapter 11 filing of Tarragon Corp. The locally based residential developer and multifamily investor and several subsidiaries filed for bankruptcy protection on Monday.

In its voluntary petition, filed in US Bankruptcy Court in Newark, Tarragon listed assets of $840 million and debts totaling $1 billion. According to a Q3 financial statement issued in November, the company had a net loss from continuing operations of $111.5 million on consolidated revenues of $275.8 million for the first nine months of 2008.

The bankruptcy filing follows a period of financial losses brought about by falling prices and slower sales in Tarragon’s homebuilding division, restrictions on the availability of financing and declining real estate values, according to a release. Tarragon’s goal is to implement a comprehensive reorganization, and the company will seek “additional outside financing and participation of a new investor or investor group,” the release states.

The company says it has a commitment for debtor-in-possession financing from an affiliate of Israel-based ARKO Holdings, Inc., and says the Chapter 11 filing is expected to have no impact on the day-to-day operations of Tarragon Management, Inc. or on the operation of the rental apartment properties in Tarragon’s investment division.

“Based on the discussions we have had with our unsecured note holders and the financial support of ARKO, we expect that we will be able to structure a consensual plan with our creditors structured to enable Tarragon to preserve the value of its property management and development platforms and maximize any return to creditors,” says Tarragon CEO William Friedman in a statement.

Tarragon’s board of directors is pursuing “all available alternatives,” according to a release. These include all available forms and sources of financing, property sales or other strategic transactions, in connection with the implementation of an overall financial restructuring plan inside the Chapter 11 proceeding.

Headquartered in Manhattan, Tarragon’s operations are concentrated in the Northeast and Southeast as well as Texas, and include both for-sale and rental apartments. Locally, it operates three condominium developments in New Jersey and one in Warwick, NY.

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