Levitt and Sons declares bankruptcy
Fort Lauderdale, Fla.-based home builder Levitt and Sons has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida, following a housing downturn and credit market disruptions.
“This downturn has been particularly sudden and steep in Florida and in the Southeastern United States — the markets in which Levitt and Sons operates,” the company said in a statement.
In its bankruptcy filing, the company lists assets of less than $1 million with more than $100 million in debts. In an earlier filing with the Securities and Exchange Commission, Levitt and Sons said it had defaulted on more than $300 million in loans with several lenders, including Bank of America and Wachovia.
Levitt and Sons, the home building subsidiary of Levitt Corp., said in a statement the move was a response to “unprecedented conditions in the homebuilding industry, which have severely impacted the company.” Options in the restructuring process include the sale of the company.
“We deeply regret the impact the Chapter 11 filing of Levitt and Sons will have on homeowners, vendors and employees,” said Lawrence Young, who recently was named to the company’s new position of chief restructuring officer. “As part of this process, we will explore the potential sale of all or some of Levitt and Sons’ assets.”
Within the last year, Levitt and Sons downsized operations in Tennessee and exited the Memphis and Nashville markets, reduced staffing and worked with subcontractors to help reduce costs. However, the company’s financial position took a blow in August when credit market disruption led to more cancellations and fewer buyers, the company said.
Pope & Talbot files for bankruptcy in Canada
Lumber producer Pope & Talbot has filed for bankruptcy protection in Canada, according to a company filing with the Securities and Exchange Commission.
The company cited a stronger Canadian dollar, coupled with “record low demand for lumber” as leading to the company’s need for protection from creditors.
In its second quarter, Pope & Talbot reported a loss of US$42.9 million compared with losses of US$21.8 million in the same period last year. Sales were US$236.6 million, up from sales of US$213.6 million last year. The company ended the second quarter with US$354.9 million in debt, and its shares were delisted from the New York Stock Exchange in August.
The company also said “high-priced pulp chips and sawdust” and “the high cost of debt service have combined for an untenable business environment.” If the company’s bankruptcy filing is approved, it will begin a restructuring process that could include “the sale of certain or all of the company’s assets.”
Based in Portland, Ore., Pope & Talbot produces market pulp and softwood lumber at mills in the United States and Canada.
M/I Homes sees losses of $21.7 million
Columbus, Ohio-based home builder M/I Homes saw a third-quarter net loss of $21.7 million, swinging from earnings of $15.2 million in the same period last year. Net revenue fell 20.4 percent to $243.7 million from $306.2 million last year.
The loss includes a $26.5 million charge for land and real estate-related impairment and abandonment, as well as a joint venture investment write-off of $6.1 million. Year-to-date the company has recorded $92.9 million in land-related charges.
Robert Schottenstein, president and CEO, said market conditions remain challenging in the company’s markets.
“We remain focused on initiatives that include reducing our land and expense levels, improving our balance sheet, as well as continued improvements in our customer service and quality processes,” Scottenstein said. “We expect to … further reduce our debt levels by year end.”
M/I Homes builds homes in Ohio, Illinois, Indiana, Florida, North Carolina, Delaware, Virginia and Maryland.