Hundreds of buyers of Levitt & Sons homes found themselves not only out of luck but out of thousands of dollars in deposits as well when the company filed for bankruptcy late last year. Their deposits may be long gone, but a new plan devised by a court-appointed receiver team offers them the chance to still get the home of their dreams--or almost.
The plan, as mapped out by Andrew J. Bolnick and the legal team at Weissman, Dervishi, Borgo & Nordlund on behalf of Bank of America, a creditor owed $103 million in loans related to eight Levitt properties, invited deposit holders to a three-day private sales event, beginning yesterday, May 19. Deposit holders were allowed to apply the amount of their original deposit as a credit toward the purchase of a Levitt & Sons model or spec home in four select communities in Florida [www.levittrecievereship.com] The event, which gives deposit holders a first crack at Levitt & Sons' standing inventory in those communities, will end on May 22.
Spokesperson Lisa Treister said the receiver team "had a nice turn out" yesterday, the first day of the event. "They closed 10 houses," she said.
Under the program, deposit holders may not end up with the home they had contracted for when they originally handed over their deposits, but at the end of the day, it ensures that their deposit money was worth something. According to a letter sent to deposit holders by Bolnick, refunds of the deposits in question are "speculative," as Levitt management spent many deposits on operating expenses.
The program's structure also protects deposit-holders-turned-buyers from any liens that were attached to the inventory homes in connection with the company's bankruptcy. The Broward County Circuit Court and creditor Bank of America have to sign off on every sale resulting from the event, but once approved, any liens are shifted from the home and applied to the proceeds of the sale.
Levitt & Sons filed for Chapter 11 bankruptcy protection on Nov. 9, 2007, in Fort Lauderdale after ceasing to make interest payments on $2.6 million in debt owed to five lenders, which triggered additional defaults on $181.5 million in loans and a $125 million revolving credit facility.