REAL ESTATES FORUM

In California, a Generational Tale of Real Estate Boom and Bankruptcy

By KATIE HAFNER
New York Times
Published: March 7, 2008

YUBA CITY, Calif. -- When George P. Dunmore started his business in
Sacramento in the early 1950s, World War II was over and the building boom
was on. Over the next several decades his company, Dunmore Construction,
along with other respected builders, took the tabula rasa that was
Californiaąs Central Valley and etched it with entire neighborhoods filled
with well-built ranch houses on trim lawns.

In Elk Grove, Calif., a Dunmore Homes development remains half-built after
work ceased last year. Dunmore had prospered in the fast-growing Central
Valley.

Mr. Dunmore lived through his share of lean years, of course; that is the
rhythm of the home construction business. But for the most part, his company
prospered. His son Sidney got into the business. And Sidney B. Dunmoreąs
boys followed him.

But by the time Mr. Dunmore died last October, at age 89, his son Sidney
found himself caught in the middle of a real estate collapse. Overextended
and pursued by a long line of creditors, the company bearing the family
name, Dunmore Homes, was sold to a New York corporation owned by a
Sacramento-area mortgage broker for $500, including the assumption of
liabilities totaling more than $250 million. Two months later, the new owner
filed for protection from creditors under Chapter 11 of the Federal
Bankruptcy Code.

A bankruptcy court in Sacramento is left with the task of untangling a web
of transactions, affidavits, property transfers, loans and liens that have
come to symbolize the real estate crisis not just for Dunmore Homes, but for
an entire industry.

Beyond that, George Dunmoreąs widow, Ruth, 84, is contending that her two
grandsons