Bankrupt Orleans Homebuilders Gets Financing, Continues Operations

Orleans Homebuilders Inc. has received Court approval on several key motions that will allow the continued operation of its homebuilding and management services operations after filing for Chapter 11 protection.

Details of the Chapter 11 filing approval include:

• It received interim approval for up to $26 million of a $40 million debtor-in-possession line of credit.
• Part of the credit line includes up to $11 million cash and up to $15 million worth of letters of credit.
• The Company intends to use the proceeds of the financing for, among other things, its ordinary course business expenses. 
• The Court approved a motion to honor prepetition claims for certain critical vendors, among other items.  Copies of signed orders will be available electronically at www.orleanshomesreorg.com.

Orleans filed for Chapter 11 bankruptcy protection after defaulting on a $350 million loan last month. The company had $440 million in assets as of the end of last year and liabilities of nearly $499 million. The Company and most of its operating subsidiaries filed voluntary petitions to commence the Chapter 11 process on March 1 in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.