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Builders lose bid to remove Inspirada developers from bankruptcy

February 4, 2011 - 6:08 pm
 

KB Homes, Toll Bros. and other homebuilders have lost a bid to end an involuntary bankruptcy case brought by creditor JP Morgan Chase over a large Henderson master-planned community.

The alleged debtors sought to remove a consortium known as South Edge LLC from bankruptcy, but bankruptcy judge Bruce Markell late Thursday ruled against the debtor, which owes $500 million.

Markell ordered the appointment of an interim trustee in the case, as requested by creditor attorney Robert Charles Jr.

South Edge was developing the 1,940-acre, $1.5 billion Inspirada community, but the project has stalled in the midst of the recession. KB holds a 48 percent stake in South Edge.

Other investors included Toll Bros., Beazer Homes, Woodside, Kimball Hill, Pardee and Meritage.

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