As we've reported, HearthStone Homes has filed for bankruptcy after an effort to sell the business fell through. Many homeowners are wondering how this will impact them.
Company vice president Scott Kinkaid confirmed that HearthStone filed for Chapter 11 reorganization on Friday.
“It's been a really nice neighborhood. It's been really quiet which I’ve liked,” said Catherine Simonsen.
Simonsen has lived in Arbor Gate, a HearthStone neighborhood, for five years.
“When we bought our home there was nothing out here. We picked our house, it was overlooking the hill and it was fields out there for years and all of a sudden it was boom, boom, boom they started filling up the lots,” said Simonsen.
But recently, she's seen a slowdown in new homes and new neighbors. Which is why she wasn't surprised when HearthStone filed for bankruptcy.
HearthStone Homes filed for Chapter 11 bankruptcy which means they're likely going to propose a plan that will allow them to reorganize, not completely shut down. This means they'll continue to operate, protecting everyone, including new homeowners.
“The warranty is not void and one of the areas that we're working on actively is addressing the warranty holders,” said attorney Robert Craig.
Back at Arbor Gate, Simonsen is concerned about future neighbors.
“What's going to happen to the rest of the properties? Are they going to remain single family homes as was zoned or are they going to try to slip some apartments in here,” said Simonsen.
“We've had no discussion with senior management that would suggest that their game plan as far as the use of the empty lots has changed at all,” said Craig.
That means for the time being, it's business as usual while HearthStone reassesses.
“I’m glad to see them fight to keep their business. I'd like to see them keep providing that service for people,” said Simonsen.
The Register of Deeds says HearthStone has 170 liens against them, 70 filed on Monday.
Lawyers tell WOWT that Chapter 11 is a very public process but it takes time.
By the way Chapter 11 bankruptcy may sound familiar because it is the same type of bankruptcy the airline industry filed last year.