NORFOLK
A Portsmouth land development company is seeking creditors' approval for liquidation of a troubled residential project by means of a public auction.
Stoney Glen, which sought Chapter 11 protection from creditors in U.S. Bankruptcy Court in Norfolk last month, was formed seven years ago to develop 140 acres in Chesterfield County for single-family lots.
Their initial agreement allowed home builder NVR Inc. the right to purchase 202 fully developed single-family lots over five years, Stoney Glen said. However, the project was hampered by the time and cost of getting needed government approvals and by disagreements with NVR, the land development company said in a statement filed Aug. 19.
Stoney Glen said it expects to attract a higher sales price for its property by using a Chapter 11 bankruptcy than a trustee could raise through a Chapter 7 filing. Chapter 11 typically is used by companies seeking to continue in business while they attempt to restructure their debts under court supervision. Chapter 7 involves the liquidation of assets and distribution of the proceeds to creditors.
At the end of July, Stoney Glen's assets totaled $7.43 million while its liabilities amounted to $9.34 million, according to a balance sheet filed with the court. Its largest creditor, Bank of the Commonwealth in Norfolk, is owed $8.84 million on a deed of trust and $231,000 on a letter of credit issued to the Virginia Department of Transportation, according to court records.
A court hearing on Stoney Glen's liquidation plan is scheduled for Sept. 19.
Tom Shean, (757) 446-2379, tom.shean@pilotonline.com
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