Neumann Homes sets bid procedures for sales of three development groups

By Caroline Salls

Pittsburgh, April 14 - Neumann Homes, Inc. has requested court approval of the bid procedures for three separate asset sales, according to Friday filings with the U.S. Bankruptcy Court for the Northern District of Illinois.

Specifically, Neumann is looking to sell substantially all of the assets related to its Clublands of Joliet, Meadows of West Bay, NeuDearborn Station, NeuStoneshire and the Conservancy/Cascairo Farm developments; its Sheldon Estates, Village Park at Stonewood Place, Stonewood Place, Towns at Stonegate Pointe, Village at Stonegate Pointe and Towns at Central Boulevard developments in Michigan; and its Tanner Trails, NeuHaven, Village at Harmony Park, Clublands of Gilberts and Mason developments.

According to the Clublands of Joliet and related developments motion, Guaranty Bank financed the developments before Neumann's bankruptcy filing and is willing to provide additional financing as well as one or more credit bids to support the sale process. Guaranty Bank has also agreed to share a portion of the proceeds of any cash sale for any developments, regardless of whether Guaranty's loans are repaid in full.

Neumann has reached a similar agreement with Comerica Bank in connection with the Michigan development sales. Under this agreement, Comerica has agreed to allow Neumann to use $80,000 of cash collateral from the sale of a condominium unit that Comerica has a lien in and to allow the company to keep a portion of the proceeds of any cash sale of the Michigan developments, regardless of whether Comerica's loans are repaid in full.

Comerica will also credit bid for the Michigan developments to support the sale process.

Finally, IndyMac Bank (IMB) financed the Tanner Trails related developments before Neumann's bankruptcy filing and is willing to provide $250,000 in supplemental debtor-in-possession financing and one or more credit bids to support the sale process. IMB has also agreed to share a portion of the cash proceeds for any developments, regardless of whether its loans are repaid in full.

Bids are due on June 26 for all three development sales, and all bids must include a 5% deposit.

Neumann will be entitled to pay a 3% break-up fee if any stalking horse bidder it selects before the auction does not ultimately submit the highest offer for the assets.

A hearing on the bid procedures for all three sales will be held on April 23.

Neumann Homes, a Warrenville, Ill.-based homebuilder, filed for bankruptcy on Nov. 1. Its Chapter 11 case number is 07-20412.

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