We Don’t Know You Anymore…
Wachovia made an interesting point a couple of days ago, while objecting Heritage Highgate’s and Heritage Residential’s motions to permit use of cash collateral and to honor warranty claims.
The bank (which has since been taken over by Wells Fargo) stated that the Heritage Homes Group “has gone to great lengths to explain to its customers that the Debtors are ‘simply land-holding companies’ that do not ‘build, warrant, or operate’ at the Project, and are not owned by Heritage. Simply put, Heritage has disavowed any relationship with the Debtors.”
Hmm, why is it that significant payment are still being made to Heritage Building Group, Inc and Heritage Homes Group, Inc (neither are in bankruptcy yet)? Specifically, Heritage Highgate’s budget included $101,565 per month, commencing in March 2009, to fund “HBG/HHG Admin Overhead”.
Anyway, I still think the extent to which a related company would disavow its relationship with bankrupt entities in the corporate group. Yes, yes, the stigma that bankruptcy carries. But in the current environment where banks and home builders (and buyers at the top of the market actually) alike are in financial distress?
