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Monday, August 04, 2008

WCI Communities Files for Bankruptcy

by Calculated Risk on 8/04/2008 09:49:00 AM

From WCI: WCI to Restructure Debt under Chapter 11; David L. Fry Named Interim President and CEO

WCI Communities, Inc. ... announced today that it and approximately 130 of its wholly-owned subsidiaries had filed voluntary petitions to restructure their debt and capital.
“While WCI remains cash-flow positive and our asset base is strong, our ongoing operations have been adversely impacted by the continuing downturn in the real estate sector and the overall economy,” said David L. Fry, the company’s interim president and chief executive officer. “Like other large homebuilders across the country, WCI continues to experience declines both in pricing and the sale of new homes and condominiums, as well as dramatic increases in cancellation rates."
"Day-to-day operations will continue as usual, while we work with our stakeholders to restructure the balance sheet,” Mr. Fry said.
WCI claims to be cash flow positive excluding their debt payments. So the company can continue operations, restructure, and the losers are the shareholders and debt holders. I wonder if any banks will be severely impacted by this filing?

According to, WCI was the 33rd largest builder in 2005, and the 40th in 2006.