Citing "unprecedented conditions" in the homebuilding industry, particularly in Florida and the Southeast, Levitt and Sons announced Friday that the company and 37 of its subsidiaries filed for bankruptcy in Fort Lauderdale, Fla. The move comes after the builder halted all projects, pink-slipped nearly 90 percent of its staff, and failed to successfully negotiate with its bank lenders to restructure its debt.
Levitt and Sons, which began building in 1929, is best known for Levittown, a community developed on Long Island, N.Y. for returning World War II soldiers and their families, The company has built over 200,000 homes throughout the U.S., Canada, Puerto Rico, and Europe. Prior to their shutdown, the company was operating in Florida, Georgia, South Carolina, and Tennessee. In 2006, Levitt and Sons was ranked No. 50 on the BUILDER 100 list.
The company also announced the appointment of Lawrence E. Young to the newly created position of chief restructuring officer effective October 22. According to the builder, Young will oversee Levitt and Sons' Chapter 11 cases and related matters. Young says the company will continue to explore options that may allow it to complete a portion of unfinished homes.
"We deeply regret the impact the Chapter 11 filing of Levitt and Sons will have on homeowners, vendors, and employees," Young said in a company statement. "We remain mindful of Levitt and Sons' customers whose homes have not yet been completed. Through the Chapter 11 process, we seek a mechanism that will facilitate the completion of some unfinished homes. Likewise, we seek a resolution that will allow closings to take place promptly for previously completed homes. In the meantime, we will continue to make Levitt and Sons representatives available to answer customer questions and do what they can to provide assistance."
"Our principal objective during the Chapter 11 process will be to identify the best means of maximizing recoveries for all creditor constituencies including our customers and employees," Young added. "As part of this process, we will explore the potential sale of all or some of Levitt and Sons' assets."
In a related matter, the Levitt Corp., Levitt and Sons' parent company, reported a third quarter loss of $169.2 million on Friday. The losses included an estimated $163.6 million in pre-tax charges associated with $154.3 million in impairment charges on homebuilding inventory at Levitt and Sons.
"The homebuilding industry, particularly in Florida, has experienced unprecedented declines with an oversupply of inventory and waning demand exacerbated by the recent disruptions in the credit markets," Alan Levan, Levitt Corp.'s CEO, said in a news release. "Levitt Corp.'s results for the quarter are a reflection of the deeply challenging environment in the housing sector and the primary cause of recent actions taken at Levitt and Sons."
Additional information about Levitt and Sons' Chapter 11 is available on the company's website. The company is also providing customer information at (877) 538-4889, and vendor information at (888) 538-4893.
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