Southern New Jersey Overlook

Foxtons, the residential real estate company known for it's heavy discounting of commissions and notorious among real estate agents for it's poor and frustrating service in handling real estate transactions, filed for Chapter 11 bankruptcy in Trenton, New Jersey this past week along with it's affiliate, Foxtons Financial.

According to most published reports of filed bankruptcy documents, the company, under the name Foxtons of North America, is headquartered in Long Branch, New Jersey. The documents list over $40 million in liabilities with assets of only $488,000. Reportedly, $90 thousand of those assets are in the form of a Bentley.

A large portion of the liabilities are owed to it's original parent company, Foxtons, Ltd of London and Foxtons of London's holding company, Heven Holdings, Ltd. (By the way, some news reports have previously appeared that listed debt of $480,944 and assets of $2.6 million.)   It also owes over $3 million in unsecured debt to Enterprise Fleet services for leasing company-branded autos as well as owing additional money to other auto leasing companies, General Electric Finance, AT&T and others -- a total of 57 creditors.

Foxtons has fired most of it's 380 employees, with about 30 remaining to help wind down operations. It has been reported that a few that were let go have already initiated lawsuits seeking damages for lost wages.

Under the umbrella name of Foxtons of North America are included a mortgage broker, a title agency, a settlement agency and an advertising agency. An affiliate, Foxtons Financial, is based in Marlton, NJ.

Apparently, the company had been under-pricing its services and working with razor thin financial margins -- which may have been potentially able to get it by in an exploding market, but now that the market has corrected and is normalizing the company could now longer sustain itself.
 
CEO John Hunt has suppsedly poured over $102 million into the company since 2000 and can no longer continue putting in money with little hope of loses stopping any time soon.

Foxtons of North America was originally started in 1999 when British real estate discounter Foxtons of London purchased YourHomeDirect.  The Asbury Park Press reported that "To raise capital, the company issued private stock offerings from 2000 to 2004. Early investors included executives and a subsidiary of Hovnanian Enterprises Inc., a Red Bank-based home builder; Toll Brothers Inc., a Horsham, Pa.-based home builder; and Kimball Hill Inc., a Houston-based home builder, according to court documents."

Foxtons' British portion was sold to a private equity firm, BC Partners, in May of this year, but Foxtons North America was left out of the deal and under control of Jon Hunt.

Foxtons currently has over 4000 homes listed for sale and plans to use the proceeds from these sales (estimated in court documents at up to $2.6 million) to help pay it's creditors. However, it remains to be seen if those homes will sell before their listing agreements expire and what level of service the home sellers will be provided in order to properly market and complete sales that are in progress.

From what we can tell from Foxtons' main web site, they are attempting to transfer (sell?) the currently listings to another broker, yet unnamed.

We've since encountered numerous complaints by buyer's agents that they are having difficulty scheduling access to listed homes to show their potential buyers.

If your listing agreement with Foxtons has expired and you believe you have a potential buyer, we may be able to help you quickly close. Feel free to Contact us.


References:
Courier-Post
Asbury Park Press
 
 
 
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