A longtime real estate developer in Northwest Washington state has fallen on hard times in this tough housing market. However, the real estate developing business is only one of four businesses operating under the umbrella Homestead Companies, all of which are now in Chapter 7 bankruptcy protection.
Homestead Companies is a family-owned group of affiliated companies that develop real estate, investment properties and golf courses. Having been in business since 1982, the company is now facing financial and legal troubles. Accused of selling unregistered securities in real estate transactions, Homestead has filed for Chapter 7 in order to protect its remaining assets and resolve its financial issues.
Each of the four separate companies was required to report financial details in the separate filings, all of which list considerably more debt than assets at this point. Three of the four companies reported debts between $10 and $50 million, with assets listed between $1 and $10 million. The bankruptcy Trustee has requested that the cases be consolidated into a single case, which may not prove to be in the best interest of the company. Further, the company could face hundreds of thousands in criminal fines if it is confirmed that the company did sell unregistered securities, debts that are not eligible for discharge in bankruptcy.