Click the play button on the video window to the see the storyFulton Homes Corp. filed for Chapter 11 bankruptcy on Tuesday; another indication of Arizona’s staggering economy.
The Tempe-based company is scheduled to have its court-mandated meeting with creditors on March 3.
"Major players like Fulton face some challenges," said Dennis Hoffman, Professor of Economics in the W.P. Carey School of Business at Arizona State University. "That doesn't mean they're a bad business."
Companies filing for protection under Chapter 11 typically remain in operation while the court reviews creditor claims and resolves debt issues.
“There will be no change in customer service or in our ability to stand behind our warranties,” said CEO Douglas Fulton in a news release. “We built this company on the customer and it will stay that way.”
“This action will enable us to operate while putting a plan in place,” he added. “The plan will be reviewed by a judge, instead of across a table with a lender. But other than that, everything will operate normally.”
In a report from the
Phoenix Business Journal, Greg Burger, co-principal of R.L. Brown Housing Reports, a Phoenix-area real estate research firm, spoke out on the company’s decision.
“Unfortunately, the filing is a sign of the challenging times builders and developers are currently facing in today’s housing market,” Burger said.
According to the company’s website, Fulton Homes has 21 communities in development in the Phoenix metro area.
"As long as this doom and gloom scenario exists, you're going to have companies like this strained and stressed," added Hoffman.
