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.