INDUSTRY NEWS

Orleans Homebuilders Files Chapter 11 Bankruptcy

03/10/2010

BENSALEM, PA -- Orleans Homebuilders, Inc. announced last week that it filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code for itself and most of its operating subsidiaries in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. Certain of the Company's subsidiaries are excluded from these voluntary petitions, including its mortgage services subsidiary, Alambry Funding, Inc., which provides mortgage brokerage services for customers and financial institutions but which does not underwrite any customer mortgages.

The company said the filing was triggered when it could not come to terms on renegotiating a $350 million loan with its creditors, which became due February 12, 2010.

This week, the Court gave interim approval for up to $26 million of the Company's previously announced $40 million debtor-in-possession (DIP) financing line, including up to $11 million of cash funding and up to $15 million of letters of credit. �The Company intends to use the proceeds of the financing for, among other things, its ordinary course business expenses.

The Court approved the Company's motions to pay prepetition employee wage and benefit charges, as well as motions to maintain the Company's existing cash management systems and to use its cash collateral. �In addition, the Court approved the Company's motions for the continuation of the Mortgage Plus Program and home warranty programs, and approved payment of prepetition amounts owed to homeowners' and condo associations. �Finally, the Court approved a motion to honor prepetition claims for certain critical vendors, among other items.

Orleans is providing information about the reorganization at www.orleanshomesreorg.com