Maryland Homes Palisades: Builder MUST Sell
On Dec 19, Caruso Homes came to an agreement with M&T Bank on the lots upon which the bank held a lien. In return for the bank not immediately filing for a motion for relief from stay to pursue foreclosure, Caruso Homes had agreed to an ambitious timetable to sell lots in the Palisade Development.
Under this arrangement, the Company has the first 3 months to sell 5 lots, the next 3 months to sell 6 lots and the last 3 months to sell 16 lots. An overview of the terms:
- Caruso Homes has until March 15, 2009 (the Sale Period) to market and sell the remaining 27 finished lots and 2 finished homes.
- Release price per lot (ie, the Minimum Price) is $125,000.
- By the end of the Sale Period, the Company must obtain contracts for sale of at least 5 lots and settle on at least 4 of them, and the Bank must receive at least $380,000 out of sale proceeds.
- Within 30 days after the Sale Period, the Company must settle on the 5th lot and the Bank must receive at least $95,000 out of sale proceeds. Otherwise, the automatic stay is deemed terminated and MTB can foreclose.
- If the thresholds and deadlines are met by the end of the Sale Period, the Sale Period is automatically extended for an additional 3 months.
- During this extended period, the Company must obtain contracts for at least 6 lots and pay the Bank at least $570,000 from proceeds. Otherwise, the automatic stay is deemed terminated.
What does this mean for buyers? Caruso Homes has to sell these units, or face foreclosure. How’s that for a bargaining chip? Plus, you now know the minimum sale price for each lot.
