Residential Real Estate and Hansen & Horn and Housing Starts and Real Estate & Retail

Judge signs off on Hansen & Horn liquidation

March 4, 2010

A Marion Superior Court judge has approved the liquidation of Hansen & Horn Group Inc., allowing a receiver to proceed with selling the Indianapolis-based home builder’s assets.

The order signed by Judge Heather A. Welch on Wednesday follows a recommendation Feb. 22 by court-appointed receiver Richard Lux that the financially troubled company’s assets should be sold in an attempt to repay creditors.

Welch in December selected Lux of R.P. Lux Co., an Indianapolis-based real estate services firm, to operate Hansen & Horn as it attempted to avoid bankruptcy.

Court documents show the company has about $7 million in assets and $14 million in liabilities. Creditors have until noon April 15 to submit a claim to the court.

Lux is directed by the court to maintain all proceeds from the liquidation in a bank account, and to file a report with the court within 90 days of the judge’s Wednesday order.

In the meantime, Hansen & Horn is prohibited from transacting any business, including issuing checks or executing contracts, the judge said.

Welch already has instructed Lux to further investigate whether any fraudulent activity has occurred between the home builder and Camp Wright Investments LLC in Pittsboro regarding the purchase of home lots at Hawks Landing within the Fishers Gray Eagle development.

However, Trenton Hahn, a lawyer at Indianapolis-based Bose McKinney & Evans LLP who is representing the receiver, said neither he nor Lux thinks Camp Wright was involved in any fraudulent activity.
 
Altogether, Hansen & Horn owns 117 lots targeted for residential development, 49 of which were purchased with loans provided by Indianapolis-based Salin Bank and Trust Co.

Salin’s loans to Hansen & Horn total $1.5 million, in which there is no equity, the bank’s attorney, Mike Lewinski of Indianapolis-based Ice Miller LLP, argued at a February court appearance. Further, the appraised value of the 49 home lots for which the loans were granted are appraised at just $950,000, he said.

“Salin would like to control its own destiny” and sell the properties on it own, Lewinski said in February. “Salin should not be harmed by the receiver’s actions, sequestering property for other creditors.”
 
In her Wednesday order, however, Welch denied Salin’s request and sided with the receiver’s position that removing the properties from receivership could negatively affect the value of other lots within the developments.

“There’s been a significant amount of interest in the assets of Hansen & Horn, and it’s coming from reputable residential developers and other real estate professionals who see value in the vacant lots and the model homes that are currently under construction,” Hahn told IBJ.

A lawsuit brought by one of the home builder’s suppliers, Indianapolis-based C&R Concrete Inc., prompted the receivership. C&R is seeking to recover $268,749 in concrete work done during the past three years.

In all, Hansen & Horn is facing at least 25 lawsuits brought mostly by subcontractors hoping to recover more than $1 million. The lawsuits are stayed pending the resolution of the liquidation.

Hansen & Horn has stopped building in about 15 subdivisions in central Indiana, including Duke Realty Corp.’s mixed-use Anson development in Boone County near Whitestown, where just a handful of houses have been built.

Anson General Manager Thomas Dickey said Duke had been preparing to continue without Hansen & Horn and is receiving interest from other builders.

“Last summer, it was clear to us that they were having cash-flow problems,” Dickey said of Hansen & Horn.

Founded in 1977, Hansen & Horn has regularly ranked among the top residential construction companies in the Indianapolis area over the past decade, building more than 200 homes during several of those years.

Any creditor who wishes to file a claim can obtain one by contacting Lux at rlux@rplux.com, or at 635-3333.

 


 

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