Florida Real Estate Developer WCI Communities Files for Chapter 11 Bankruptcy Protection
WCI Communities, along with about 130 of its subsidiaries filed today for reorganization after the homebuilder failed to raise more funds.
Palm Coast, Florida – August 4, 2008 – After turning down a tender offer of $22 per share only 15 months ago, Florida real estate developer WCI Communities filed today for Chapter 11 bankruptcy protection to prevent lenders from immediately seizing the company’s assets. The move was not unexpected by analysts. The company announced that day-to-day operations will continue and employees will still be paid. WCI shares which closed Friday at $1.26 were quoted at $.02 per share this afternoon, down 98.41%.
Current lenders agreed to terms allowing WCI access to its present $50 million cash balance to support continuing operations. WCI is reportedly negotiating with a lender for an additional $100 million cash. According to the filing, WCI has $2.18 billion in assets and $1.92 billion in debts.
Billionaire Carl Icahn, WCI’s chairman, said, "The company, with all diligence has attempted to avoid a bankruptcy filing. However, the filing became necessary." According to Thompson Financial, Icahn’s SAC Capital Advisors LLC has recently sold 3,545,700 WCI shares which traded between $1.26 and $1.91.
WCI Communities was named America’s Best Builder in 2004 by the National Association of Home Builders and Builder Magazine. WCI developed condominiums in the Palm Coast area private community of Hammock Dunes (Northeast Florida) where it still holds unsold inventory, including approximately 30 condominium units and oceanfront land entitled for condominium development.
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