As troubles continue to mount for Hollywood, Fla.-based Technical Olympic USA (TOUSA), including a third-quarter net loss of $619.7 million, the home builder says it is considering Chapter 11 bankruptcy protection. The comments came in the company's third quarter report:
"As of September 30, 2007, the Company had stockholders' equity of $48.3 million. Based on the foregoing, the Company believes there is substantial doubt about its ability to continue as a going concern. The Company is considering all available in and out of court restructuring and reorganization alternatives, including a possible Chapter 11 filing.
"Such alternatives include, among other things, restructuring its capital structure through the exchange of some or all of its outstanding indebtedness for equity in the Company. TOUSA's ability to continue as a going concern will depend upon its ability to restructure its capital structure including exchanging a large portion of the Company's outstanding indebtedness for equity."
Over the past six weeks, the builder has retained financial advisory and asset management firm Lazard Freres & Co.; hired Kroll Zolfo Cooper, a financial advisory and interim management firm, to assist the home builder in evaluating its restructuring options; delayed the release of its third quarter results by more than a week; declined to hold an investor's teleconference in relation to their quarterly results; received a letter of default from Deutsche Bank Trust Company; and was notified by the New York Stock Exchange that delisting procedures may begin.
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