Builders lose bid to remove Inspirada developers from bankruptcy
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.