Orleans Homebuilders

Division: Phoenix Management Services


Orleans Homebuilders is a $300 million company that markets, develops and builds high-quality, single-family homes, townhomes and condominiums to serve various types of homebuyers, including move-up, luxury, empty nester, active adult, first-time move-up and first-time homebuyers in six states (NY, NJ, PA, VA, NC and IL) .


Orleans Homebuilders, and the entire U.S. homebuilding industry, experienced a significant and sustained downturn characterized by decreased demand for new homes, an oversupply of both new and resale home inventories (including homes under foreclosure), a decline in average selling prices and aggressive competition amongst homebuilders. The declining real estate market negatively impacted homebuilders nationwide. The decrease in demand for new homes was exacerbated by the global credit crisis, which made traditional mortgages more difficult to obtain, and their terms and pricing more onerous, resulting in a challenging lending environment for an increasing number of prospective home buyers. As a result of these and other external factors, the Company’s consolidated revenue dropped from $987 million to $330 million just four years later, and the Company’s pre-tax income declined during the same period from $65 million to negative $160 million.

At the time of the Orleans Homebuilders bankruptcy filing, the Company faced numerous operational and financial challenges — any one of which had the potential to be the event that forced the Company to cease operations. Orleans’ 17-member, syndicated lending group, made the collective decision to not extend the previously-extended maturity dates of the Company’s $350 million credit facilities and issued a default and reservation of rights letter. In light of the Company’s filing, Orleans lost the support of its critical title insurer and home warranty providers. Material vendors and numerous subcontractors had been stretched to the point that the Company had effectively ceased homebuilding operations during the 4-6 week period prior to the bankruptcy filing. Management was unable to create a cohesive strategy designed to enable the Company to emerge from its dire condition. Finally, the Company’s 300+ employees lost operational focus as the Company’s long-term health was in serious doubt.


Phoenix Management, in concert with Cahill, Gordon, and Reindel and multiple, other professionals, immediately constructed and implemented a comprehensive turnaround plan incorporating integrated legal, liquidity, operational, and organizational strategies. The turnaround team coordinated the negotiation and approval of a $120 million DIP facility and developed a procedure that allowed Orleans to sell homes free and clear of liens while preserving the rights of holders of claims against the properties.

Nine months to the day from Orleans’ filing for Chapter 11 protection, the U.S. Bankruptcy Court for the District of Delaware confirmed Orleans’ Modified Second Amended Joint Plan of Reorganization. Subsequently, the Company completed its financial reorganization and emerged from Chapter 11 as a newly reorganized company with $160 million in exit financing, including a $30 million credit facility. The new company is privately owned and is led by respected industry veteran, CEO George Casey, and a new board of directors.

The post-bankruptcy Orleans is marked by a streamlined management team, strong operations and less than half the debt the Company had on its balance sheet when it filed for bankruptcy protection. At a time when very few homebuilders successful emerge from bankruptcy protection, a company’s legacy that extends back to 1918 as well more than 200 jobs were saved via this successful turnaround. In addition, in-process homes for more than 500 families were able to be completed that otherwise would have been left unfinished if the Company had ceased operations.

Going forward, with its reorganized operations and healthy balance sheet, Orleans Homebuilders is poised to be an industry leader in the development and building of high-quality, single-family homes and townhouses.