Las Vegas Builder, American West, Files for Bankruptcy Protection

Las Vegas, NV- Las Vegas home-builder, American West Development Inc. filed for Chapter 11 reorganization in U.S. Bankruptcy Court.

In their bankruptcy filing, American West listed their assets at $50 million or more with debts totaling $100 million or more. They have reached a reorganization plan with seven of their creditors led by California Bank & Trust, according to Bloomberg.

Under bankruptcy protection, a bankruptcy lawyer can negotiate with lenders to develop a debt repayment plan, but creditors expect to take some losses.

The company has eight housing developments in the Las Vegas area. Nevada has been hit hard by the housing crisis and has one of the highest foreclosure rates in the country. The economic downturn over the past few hit the home building industry hard, especially in southern Nevada. In 2009, an American West competitor, Jim Rhodes had to declare bankruptcy but was no longer able to continue running his business.

A Chapter 11 filing is recommended by bankruptcy attorneys for companies that wish to continue operating while they work to pay off their debts.

American West revenues plunged $12.2 million in 2011. Research from VEGAS INC. showed that American West is the eighth largest home builder in Las Vegas.

Bankruptcy gives the financially insolvent business the opportunity to reduce or eliminate some of their debts, depending on the plan their bankruptcy attorney thinks will be most appropriate for the needs of the business.