MacGregor Development seeks bankruptcy protection

MacGregor Development, the company behind Cary neighborhoods such as MacGregor Downs and Lochmere, is seeking bankruptcy protection.

"The short story is: Buyers have stopped buying, and lenders have stopped lending," Michael Whitehead, the company's president, said Monday.

An increasing number of home builders and developers across the country are filing for bankruptcy as home sales slump.

MacGregor Development listed assets of $23.8 million and consolidated debt of $41.4 million in Chapter 11 documents filed Friday in U.S. Bankruptcy Court.

Whitehead's company is developing 200 residential lots on 300 acres in Chatham County.

He expected to sell about two dozen lots to custom home builders and individual investors early this year. But the deals fell apart as lenders tightened borrowing standards "and as investors got scared of real estate," Whitehead said.

The lack of sales in Chatham spooked the lender on another MacGregor project, RiverTowne in Raleigh, he said.

That project is planned to yield 700 residential lots. Whitehead was on schedule to begin selling units in late 2009, but the lender declined to extend a loan deadline, forcing Whitehead to file for bankruptcy protection.

MacGregor listed the Raleigh project, including 357 acres, as an asset valued at $17.5 million in a May appraisal. Whitehead also listed these assets: 26 acres elsewhere in Wake County, valued at $3.2 million in a June 2006 appraisal, and a 35 percent interest in 3.7 acres in Raleigh that it valued at $30,000.

MacGregor owes $7.7 million to creditors with secured claims and $33.6 million to creditors without collateral backing their claims. That figure includes guarantees of certain development loans.

SunTrust Bank, owed $4.7 million, is the largest secured creditor, court documents show.

Whitehead said that, through reorganization, some assets will be retained and some will be sold. "The intent is to reorganize as a smaller, leaner company," Whitehead said.