Creditors file to force Focus Property Group
CEO Ritter into personal bankruptcy
The end of the recession hasn’t meant the end to financial woes
for a high-profile Las Vegas developer.
Three creditors have filed to force John Ritter, chairman and
CEO of Focus Property Group, into personal involuntary bankruptcy.
Pacific Western Bank, SV Litigation SPE LLC, and Multibank
2009-1 RES-ADC Venture LLC filed the case Monday in U.S. Bankruptcy Court for
the District of Nevada. The petition seeks to place Ritter into Chapter 7
bankruptcy to liquidate assets and collect $25.6 million in loan guarantees
that Ritter personally made.
At least one of the creditors has an agreement with Ritter in
which the developer acknowledges his unpaid debt, said Gerald Gordon, a partner
in the Las Vegas law firm of Garman Turner Gordon. Gordon represents the
Two others already have judgments against Ritter, Gordon added.
He said he expects other creditors with judgments against Ritter
to join the case soon.
An attorney for Ritter said in a Thursday statement that Las
Vegas’ status as “ground zero for the Great Recession and housing crisis” had a
“very negative effect” on Ritter’s financial condition, as it did for other
Since the recession, Ritter “has consistently attempted to work
with his creditors to reach constructive and consensual solutions and has
successfully resolved the vast majority of his outstanding obligations,” said
Roberto Kampfner of the law firm of White & Case LLP. “Mr. Ritter fully
intends to continue that effort notwithstanding the involuntary filing against
him and hopes his creditors will do the same. Importantly, the involuntary filing
is against Mr. Ritter alone and is not a filing against Focus Property Group.
Mr. Ritter has no comment at this time on the merits of the petition, but looks
forward to defending himself in court.”
At issue are properties that Ritter owned through Focus. He
sought investors to help develop the properties, but he personally backed the
loans. When property values tanked, Ritter himself had to make good on the
Gordon said he’s not sure where the properties were, but he said
“they’re long gone or dealt with.”
It’s not Ritter’s first brush with financial trouble.
During the housing bubble, his company bought large tracts of
federal land at highly inflated prices through public auctions.
Along with seven home builders, Focus spent $557 million on
1,953 acres of Bureau of Land Management property in 2004 for the 8,500-home
Inspirada master plan. In 2005, it spent another $510 million on 1,700 acres at
U.S. Highway 95 and Fort Apache Road, with plans for a 16,000-home master plan
called Kyle Canyon Gateway.
But by February 2008, home sales across the Las Vegas Valley had
plummeted. Focus could no longer cover interest payments on the Kyle Canyon
property. Wachovia Bank foreclosed on the land in November 2008 before a single
home was built.
At Inspirada, Focus and its partners sold about 650 homes before
JPMorgan Chase forced the developers into involuntary Chapter 11 bankruptcy in
Both projects have new owners and are back under development.
Olympia Cos., which developed Southern Highlands, has reimagined Kyle Canyon as
Skye Canyon, a 9,000-home master plan with an outdoors-focused lifestyle. Homes
are under construction now and a grand opening is planned for March 16.
At Inspirada, four builders led by Pardee Homes began rolling
out dozens of new models in 2014.
Focus has had success with some projects.
Its 3,500-acre Mountain’s Edge, at Blue Diamond Road and Rainbow
Boulevard, was the nation’s fifth best-selling master plan in 2014, with 609
sales, or about 10 percent of the local new-home market, according to Maryland
consulting firm RCLCO.
Focus’ 1,200-acre Providence at Grand Teton Drive and Hualapai
Way ranked No. 13 in 2015, with 452 sales, or about 6.5 percent of the local
Both communities are close to build-out