Builder Regency having 'difficulties' Company, No. 8 in Baltimore-D.C. area, may be bought

Real estate

July 10, 1998|By Robert Nusgart | Robert Nusgart,SUN STAFF

Regency Homes Corp., the Baltimore-Washington area's eighth-largest homebuilder, said yesterday that it is having financial difficulties.

Frank V. Mazza, Regency's chief executive officer, said in a statement yesterday that "Regency is experiencing business difficulties that have impacted home deliveries and relations with customers, subcontractors and suppliers."

Industry sources said the company, which has 26 communities from Baltimore to Northern Virginia, might be close to being purchased by another builder.

Mazza said that as a result of its financial troubles, "the company is pursuing strategic alternatives in order to provide the best outcome for its customers, subcontractors, suppliers and creditors. We are working within current restraints to resolve issues with our customers, subcontractors, suppliers and creditors.

"Regency apologizes for the inconvenience and delays to its customers and subcontractors," he said in the statement.

Asked yesterday whether the company had filed for bankruptcy protection, Karen S. Krupsaw, vice president of corporate marketing, said, "Not to date."

However, the company has been trimming its staff since the beginning of the year and has had difficulty retaining sales agents at model homes in its communities.

Speculation is focusing on a possible purchase of Regency by Atlanta-based Beazer Homes USA, the nation's 12th-largest homebuilder. According to a source close to Regency's situation, Beazer "is definitely someone that they have been talking to."

"I know they've talked to several companies [about an acquisition]. They've had offers that they've been considering and negotiating. So is it imminent? It sounds like that is the direction that they are going," the source said.

Mazza started Regency in 1987.

In the past three months, suppliers, contractors and buyers have filed at least half a dozen lawsuits against Regency in Maryland courts.

Among them is one by Greg and Mary Lazzaroni, who contracted to build a $269,000 home in the Springhouse Station development in White Marsh in October. Their lawsuit in Baltimore County Circuit Court claims that, after many delays, Regency built their home using weather-beaten materials that "deteriorated, warped, bowed and dissolved" in the construction. They sued for breach of contract, seeking a refund of their $12,000 deposit.

Mark and Joan Flister found themselves in a similar situation, but instead of going to court, they decided to break their contract and forfeit a $2,500 deposit on a home in Carroll County's Hawks Ridge development.

Pub Date: 7/10/98

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