A real estate developer whose projects included approximately five million square feet of residential and commercial property in Las Vegas since 2006 has recently filed for Chapter 7 business bankruptcy protection. Just as in Ohio, the real estate bubble and the foreclosure crisis have hit Las Vegas hard, and real estate developers have felt the pinch in their profits.
This particular developer had a number of projects in various stages of completion, including both residential and commercial land development deals as well as office and retail space. Unfortunately, the projects were either never completed or failed to find the necessary buyers and tenants. This left the developer with millions of dollars in unpaid debts with no corresponding income. At this point, it is estimated that his liabilities in fact exceed $100 million, while he only has approximately $50,000 in assets.
This case is an example of how the real estate bubble took many experienced, careful businesspeople by surprise. Even those who had weathered numerous other crises found themselves in the position of having unmanageable business debt and little or no access to the credit they needed in order to keep operating. In the area of real estate development in particular but in all real estate-related industries, the weakness of future business prospects gave creditors little reason to extend more loans.
This developer was already faced with several lawsuits for unpaid bills. Now that he has filed for Chapter 7 bankruptcy however, creditors will be subject to the Bankruptcy Code. As a result, the lawsuits are ended, creditors can no longer contact him or his business, and the development company's qualifying assets and debts will be put into the care of a bankruptcy trustee who will assess and distribute them.
The drastic change in the real estate market in Ohio and throughout the U.S. has left many financially responsible people overwhelmed by crushing debt and desperate to find a way out from under it. Whether for individuals or businesses, bankruptcy can offer an ending -- and a fresh beginning.
Source: Vegasinc.com, "Las Vegas developer Bill Plise files Chapter 7 bankruptcy," Steve Green, April 23, 2012