Seven months after emerging from a bankruptcy in which it owed a total of $210 million to 14 banks, Maronda Homes unveiled a new line of luxury homes Tuesday as the Clinton company celebrates 40 years in business.
"It was really a vision on [company president] Ron Wolf's part to come out with something different," said Corky Houchard, vice president. "He wanted to offer more state-of-the art upgrades like wood floors, 9-foot ceilings and three-car garages."
The new model, known as the "Presidential Series" line, comes with gourmet kitchens, tray ceilings and crown molding. The 4,800-square-foot home showcased Tuesday at Maronda Farms in Clinton, which featured a finished basement and sunroom, sells for $449,900.
Pittsburgh's third largest home builder was forced to file Chapter 11 reorganization in April 2011 when a cartel of 14 lending institutions led by Bank of America and Wells Fargo required a new loan agreement that would have substantially increased the interest rate charged and required far more collateral.
Although Maronda was current with its bank loans and all of its vendors, contractors and employees were being paid as promised, the ripple effects of the mortgage lending crisis led the banks to move to protect their own interests.
At one point, the banks began insisting on taking 100 percent of all proceeds of any homes Maronda sold, which forced the homebuilder to pay operating expenses out of its reserve capital for a period of several months.
"Their trip through Chapter 11 is over," said Joseph McDonough of the Buchanan Ingersoll & Rooney law firm, Downtown. "It was resolved with a new three-year loan agreement. The company reported it is back on solid financial footing and its sales are increasing in Pennsylvania.
"It was Maronda's intention to pay all creditors in full and they did it. No one lost a dollar as a result of Maronda's bankruptcy," said Mr. McDonough, who represented Maronda. "The company is back to being a builder rather than arguing with lenders and going through court proceedings."
Maronda is a private family-owned company that was started in 1972 and now operates in Pennsylvania, Florida, Ohio, Kentucky and Georgia. The company employs 280 people in the Pittsburgh area.
The company's rebound comes at a time when new residential home builders across the nation are feeling more confident that the housing market has finally turned around.
Builder confidence in the market for newly built single-family homes rose six points in July to 35 on the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday. It is the largest one-month gain recorded by the index in nearly a decade and brings the index to its highest point since March 2007.
"Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved," said Barry Rutenberg, chairman of the National Association of Home Builders in a press release issued Tuesday by the organization.
Mr. Houchard said Maronda's president was busy developing the concept for the new model while the company was still struggling through the bankruptcy proceedings.
"What doesn't kill you makes you stronger," he said. "That's completely behind us.
"We had to get our bank loans straightened out with our banks, and it happened to coincide with the evolution of the Presidential Series."
Tim Grant: email@example.com or 412-263-1591