Kara's Cash Crunch Continues Just when things looked brighter for Kara Homes, the $5 million in financing that the New Jersey–based builder secured to keep it afloat for another month while Chapter 11 bankruptcy proceedings continued evaporated. And without an influx of capital, Kara cannot fulfill its obligations to lenders, customers, or remaining employees, who are owed three weeks of pay. Medical Capital pulled the plug on debtor-in-possession financing for Kara in late October. However, the company now says Bears Stearns will provide $2.6 in interim financing.
Kara also will hire crisis management company Traxi of New York to speed reorganization. Company founder Zudi Karagjozi will turn over operations to chief restructuring officer Perry Mandarino, a Traxi principle.
In the meantime, lenders are growing impatient. Some are calling in on the personal guarantees Karagjozi made on loans totaling $248 million.
Correction In “WCI's Woes Continue,” (see BIG BUILDER, Nov. 15, page 12), we misidentified the addressee of a letter from shareholder Basswood Capital Management. The letter was addressed to Don E. Ackerman, the company's chairman of the board. Further, the article did not correctly indicate that WCI plans to complete eight towers in the fourth quarter of this year. BIG BUILDER regrets the errors. Also, WCI is renegotiating land options and has some of its golf courses and other land for sale. Land sales are a common activity for the company. Company officials say the story mischaracterized how much land is up for sale.
What's in a Name? KSI Services, a northern Virginia development company, is changing its name to Kettler, in honor of its chairman, Robert C. Kettler, who founded the company 30 years ago. The company's name change is part of its game plan to distinguish itself from competition in a tough economic climate. “While others are trying to adjust to the market, we are going to take the opportunity to move ahead by evolving our marketing identity and our brand,” Kettler said in a statement. “We are purposefully setting the stage to increase business flexibility and prosperity with this name change.”
D.R. Horton reshuffles its corporate structure, eliminating one regional COO and realigning two others. Former Western region COO Thomas F. Noon resigned while Gordon D. Jones' and George W. Seagraves' titles shifted to regional president.
Former KB Home Gulf Coast division president Steve Davis finds a new position at Meritage Homes Corp. In the newly created role of executive vice president of national home building operations, Davis will oversee customer satisfaction and national supply chain and marketing.
The Ryland Group also fills a newly created position. Kipling “Kip” Scott, a 13-year Ryland veteran, moves from a regional president role to COO. The promotion also moves Peter Skelly from Chicago division president to a regional president role, overseeing operations in the Midwest and Mid-Atlantic.
Florida-based Bonita Bay Group selects Scott R. Whitney for the position of senior vice president and CFO for the company.
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