Washington Post: Housing Crunch Flattens More Companies

[marmar]

Housing Crunch Flattens More Companies
Souring Economy Spreads Its Tentacles, Causing Business Insolvencies to Rise
By Anita Huslin
Washington Post Staff Writer
Monday, March 17, 2008; Page D01

As the housing and credit markets continue to spiral downward, business casualties are rising rapidly in bankruptcy courts across the Washington region.

The number of corporations that have filed for Chapter 11 protection to reorganize so far this year in Maryland, Eastern Virginia and the District has more than doubled, compared with the same time period last year, court records show. The number of mostly smaller firms filing to liquidate under Chapter 7 increased far faster during that time frame, growing more than 12-fold.

"I'm talking to people about liquidating like never before," said Bethesda lawyer James A. Vidmar Jr., who is representing a second-generation Montgomery County developer who filed for Chapter 11 bankruptcy after his builder bailed out of a 1,000-lot Delaware project. The developer had guaranteed a loan on that project with revenue from his Maryland development company, but fell behind on payments and filed for bankruptcy on both after his lender moved to foreclose.

"Selling real estate is not a good business to be in these days," said Stephen Goldberg, a Baltimore area lawyer who is representing Sandy Spring Bank, which called in its $13.5 million loan to the developer.

Vidmar said his firm has filed five business bankruptcies since the beginning of the year. "If you owe more than you think you could get for a project, you may have to sell it or give it back to the bank and start over," he said. .......(more)

The complete piece is at: http://www.washingtonpost.com/wp-dyn/content/article/2008/03/16/AR2008031602207.html?hpid=topnews

[enid602]

1. bad

When the effects of the downturn are even felt inside the Beltway, you know it's bad.