Luxury Home Builder WCI Files For Bankruptcy
RENEE MONTAGNE, host:
And the housing slump has forced another home builder into bankruptcy, and it's one of the largest yet. WCI Communities builds luxury condos in Florida, and it's headed by billionaire investor Carl Icahn. NPR's Greg Allen has more.
GREG ALLEN: For Carl Icahn and WCI Communities, it's quite a comedown. Just last year in a bid to take over the company, Icahn offered to pay $22 a share. Yesterday when trading was suspended, WCI shares were selling for just 66 cents. The company initially rejected his offer, but there were protracted negotiations and Icahn ended up as company chairman.
Yesterday in a release he said the company was being forced to file for Chapter 11 bankruptcy because it had been unable to restructure its massive debt. With yesterday's filing, WCI joins in bankruptcy two other home builders active in Florida - Levitt and Sons and Tousa. WCI concentrated on the high-end market, luxury home developments and million dollar condos.
Jack McCabe of McCabe Research And Consulting says WCI expanded aggressively and when the housing market in Florida collapsed, the company, like many others, was holding too much debt.
Mr. JACK MCCABE (McCabe Research and Consulting): WCI was always a very, very quality home builder. It had done a lot of construction in Florida, built good products. And this is another unfortunate company that is going bankrupt. But it's not the first and it by no means is going to be the last as we continue through the downturn.
ALLEN: Under Chapter 11, WCI now has protection from its creditors while it works to restructure its debt. The company says it's already secured a $50 million loan to cover operating expenses while it's in bankruptcy.
Greg Allen, NPR News, Miami.
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