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2009-01-06

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stories: walterind.com

Jim Walter Homes is closing per a press release from their parent company, Walter Industries:

Walter Industries, Inc. (NYSE: WLT) announced today the closure of its Jim Walter Homes subsidiary. Jim Walter Homes built more than 350,000 homes during its history, but has not been profitable in several years. . . .

Tampa entrepreneur Jim Walter founded Jim Walter Homes in November 1946, when he used $395 in savings to buy and sell his first "shell" home, for a profit of $300. As a result of the success of Jim Walter Homes, Jim Walter was able to build a Fortune 500 conglomerate with businesses as diverse as mortgage financing, coal mining and ductile iron pipe manufacturing.

Jim Walter Homes (website: jimwalterhomes.com) was one of the top 50 U.S. home builders in 2006 and 2007 per builderonline.com closing over 2,500 homes in each of those years.

The closure will affect 230 people, 45 of which are at the Jim Walter Homes headquarters in Tampa, Florida. Further to the press release:

Those employees affected by this announcement will be eligible for unemployment compensation and are expected to receive severance benefits in line with Company policy.

The Company stressed that while sales efforts will cease immediately, Jim Walter Homes will meet all of its obligations to customers with homes in progress as the business is wound down. At Dec. 31, 2008, Jim Walter Homes had approximately 150 homes under construction.

Customers of Jim Walter Homes who have questions or concerns about a home under construction should call 1-800-925-8374, ext. 4444.

Finally, we obtained an internal memorandum distributed yesterday (Jan 5, 2009) regarding the impending closure of Jim Walters Homes. The memorandum was from Vice Chairman and CFO Vic Patrick. Patrick noted:

Despite the efforts of Jim Walter Homes' management and employees, including a major restructuring in 2008 that closed nearly half of the Jim Walter Homes' sales centers, challenges to the business remained. Efforts to sell the business were unsuccessful in the face of the unprecedented conditions in the housing industry and tightness in the credit markets. I want you to know that our Board struggled with this decision for some time and evaluated a number of different alternatives before identifying a liquidation of the business as the best path forward.

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Comments:

cranky yankee at 10:43 2010-01-13 said:
Little wonder JWH has folded-for a second time. The homes they built were what you would expect to find in a Potter-ville. Due to the fact that everything was subbed out and the crews were paid a flat rate, the workmanship was utter crap. I owned a Jim Walter Home and had problems from the foundation up. Starting with the foundation, they didn't get a required inspection prior to pouring the footings. Then the framers had so many walls out of plumb and out of alignment, most had to be rebuilt. Wall board, subfloor and sheathing was only half nailed. Wrong shingles were put on the roof and then covered with over-spray from painting. What a three-ring circus. Ended up withholding the sign-off and filed a complaint with Florida DPR to get any action. Had the president of the company come down and agreed it was crap but never made good on punch list. Permalink
houston at 10:04 2010-01-16 said:
I don't know too much about JWH but it sounds like they suffered a management breakdown. What Cranky Yankee described was a direct result of an untrained superintendent or the result of building a house via the telephone and not in the field. In any event, poor management allowed that to occur. Permalink
robertsamual at 04:08 2011-01-11 said:
Then the framers had so many walls out of plumb and out of alignment, most had to be rebuilt. Wall board, subfloor and sheathing was only half nailed. Wrong shingles were put on the roof and then covered with over-spray from painting.
Hmnm. May be you are right about them but i actually never heard anything seriously bad about their walls out of plumb or anything which required rebuilding. What are the others reviews? Permalink
nattylite at 17:22 2011-05-01 said:
They could just be going under because of the economy. It's been really hard to get the proper funding to build homes where I live in Florida. Every contractor will have someone that isn't happy with their work. It happens to the best of us so I doubt there going under for doing poor work on their homes. Permalink

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Important: This company is on our list of builder operations that have "imploded" (see also ailing lenders). This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid declines in enterprise value; or abnormal "bail-out" by corporate parents or peers in order to continue to operate. The builders may be residential or commercial.