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Thursday, 19 October 2006 |
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BREAKING NEWS: Kara Homes expected to get interim financing
One of the largest home builders in Monmouth and Ocean counties, Kara Homes filed for Chapter 11 bankruptcy protection on Oct. 5. The filing has left many prospective homeowners who had contracts with Kara wondering if their homes will ever be completed or if they'll get their downpayments and deposits back.
BREAKING NEWS: Kara Homes expected to get interim financing
BY DAVID P. WILLIS
BUSINESS WRITER
TRENTON — A U.S. Bankruptcy Court judge said today she would allow Kara Homes to borrow $1 million to meet its payroll, hire security guards at its housing developments and pay other expenses through the end of the month.
"If we don't get it, the debtor doesn't have any way to keep the lights on,'' said David Bruck of Woodbridge, the lawyer for Kara Homes.
One of the largest home builders in Monmouth and Ocean counties, Kara Homes filed for Chapter 11 bankruptcy protection on Oct. 5. The filing has left many prospective homeowners who had contracts with Kara wondering if their homes will ever be completed or if they'll get their downpayments and deposits back.
Kara laid off many of its employees a few days before it filed for bankruptcy, and they have become creditors, but the East Brunswick-based builder still has about 70 workers on its payroll, although they have not been paid for several weeks.
After confering with lawyers representing several of the banks that Kara Homes owes money to, U.S. Bankruptcy Court Judge Kathryn Ferguson said she would sign an order granting Kara Homes' request to obtain the financing.
Kara Homes is receiving the $1 million in interim financing from Medical Capital Group.
A hearing on Kara's request to borrow $5 million from Medical Capital Group to start finishing about 300 uncompleted homes, which was scheduled for today, has been postponed until Oct. 30.
David P. Willis,
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or (732) 643-4039
http://www.app.com/apps/pbcs.dll/article?AID=200661019026
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