Washington Homes buys 100 Regency lots Homebuilder pays Provident, First Union $7.3 million for assets

Real estate

October 30, 1998|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

Washington Homes Inc., whose $25.5 million offer to buy the assets of bankrupt Regency Homes Corp. was rejected by lenders, came to terms yesterday with two banks to purchase part of the assets for $7.3 million.

Christopher Spendley, chief financial officer for Washington Homes, said Provident Bank of Maryland and First Union National Bank of McLean, Va., had sold 100 lots in various communities in Maryland and Virginia to his Landover-based company.

A bankruptcy court order this month cleared the way for Provident, First Union, Bank United of Sterling, Va., and Ohio Savings Financial Corp. of Cleveland to take back a total of 300 lots in exchange for $21 million in secured claims against the Regency estate.

Zvi Guttman, trustee for the Regency bankruptcy, said the price paid by Washington Homes comes close to what Provident and First Union paid to take back their lots.

Yesterday's agreement, which is scheduled to close Nov. 6, clears the way for Washington Homes to meet with numerous consumers left in limbo after Regency Homes, once the largest private homebuilder in Maryland, filed for Chapter 7 liquidation in July.

"Not all of the lots that we acquired had contracts on them, but there are a portion of the lots that did have contracts on them," Spendley said. "We intend to deal with each contract and each lot individually and will meet with or discuss with each customer, based on their certain circumstances, what is the best way to complete the houses."

Ray Schlissler, managing director of the real estate lending division for Provident, said the agreement puts an end to a "long and arduous" journey.

"Washington Homes really came in at the last minute and after a lot of false starts by a lot of other people was able to perform and perform rather quickly," he said.

Washington Homes "had been familiar with the collateral and had looked at it previously, and in the end, while buying Regency as a total package didn't make sense, buying certain assets for them did make sense," he said.

"What we had, and what First Union had, fit what they wanted," Schlissler said.

Michael Gallerizzo, the attorney representing First Union, could not be reached for comment.

Since Washington Home's original offer for Regency's assets in August, the company has acquired a list of Regency buyers.

"For the ones that contacted us and [we] are in receipt of their assets because of our agreement with the bank, we will contact them very quickly, within 10 to 15 business days," Spendley said.

Pub Date: 10/30/98

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