Fulton Homes Files Chapter 11 Bankruptcy

As a builder of new homes in Arizona for 35 years, Tempe-based Fulton Homes Corp. has filed for Chapter 11 Bankruptcy. Fulton is just one of the latest home builders in Arizona to file bankruptcy due to the collapse of the new-housing industry.

Many builders have blamed their banks, arguing that the banks are demanding additional capital so that their loan values do not exceed the declining property values of the builders’ inventory.
Fulton founder and Chief Executive Officer, Ira Fulton, is a well-known community figure and one of the state’s most highly recognized philanthropists. The Fulton Foundation has contributed more than $160 million to Arizona State University.

Court documents show that Fulton Homes owes between $100 million to $500 million to some 100 individual creditors, which includes Bank of America as their lead creditor. It is estimated that Fulton holds from $100 million to $500 million in assets.

Chapter 11 of the U.S. Bankruptcy Code allows for the company to remain in operation while the bankruptcy court determines creditor claims and resolves debt issues. There is, however, a high probability that Fulton will be challenged when attempting to secure new credit in order to continue building new homes.