MCLEAN, VA. HC — MCLEAN, Va. -- NVR L.P., a major regional homebuilder, said it will take the next step today in its plan to complete a comprehensive financial restructuring by filing Chapter 11 bankruptcy petitions for itself and some of its subsidiaries.
None of the company's financial services operations, including NVR Mortgage L.P. and NVR Savings Bank FSB, will be involved in the filing, NVR said.
The company, which has been squeezed for credit, also said it intends to continue its current schedule for its home building operations and to pay all of its trade creditors, using funds to be provided from some of its principal bank lenders.
In addition, the company said it has obtained about $80 million in new financing forits mortgage banking business.
NVR said it will seek approval ofthese arrangements from the bankruptcy court for the Eastern District of Virginia, Alexandria division.
In December 1990, when NVR did not pay the interest due on its publicly held subordinated debt and defaulted on its bank lending agreements, it announced that it would begin discussions with its principal bank lenders and a committee formed by some of its bondholders to develop a financial restructuring plan.
The company owes about $160 million to its principal bank lenders, and has about $205 million of bonds outstanding.
NVR said it has developed a proposal for restructuring its bond debt that should bring agreement from the bondholder committee. The proposal calls for all of the company's outstanding bonds to be converted into equity as part of the reorganization plan.
NVR's senior and junior subordinated bondholders would receive 80 percent of NVR's fully diluted equity, with the respective exchange rates for the senior and junior bonds to be set forth in the plan of reorganization.
The remaining 20 percent would be allocated among the company's public shareholders, its preferred shareholders,certain other creditors, and management, with about 8 percent of the fully diluted equity being allocated to the public unit holders .
NVR Chairman Dwight C. Schar said NVR plans to continue discussions with its principal bank lenders regarding the long-term financial restructuring of credit.