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Levitt and Sons - Residential Home Builder

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2007-11-09

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stories: sun-sentinel.com, orlandosentinel.com, orlandosentinel.com, news-press.com

Update, 2008-06-28

On Friday Levitt filed to liquidate the company, dashing hopes for a reorg. The Sun-Sentinel has more:

The builder, which filed for bankruptcy protection from creditors last fall, revealed in court papers late Friday that it plans to wind down operations. A bankruptcy judgestill must approve its liquidation plan.

"It's abundantly clear and fair to say that Levitt and Sons will not reorganize," said Paul Singerman, the builder's bankruptcy lawyer. "It's just an awful market for residential developers."

...

"These pricing pressures are expected to continue for the foreseeable future as there is no indication that market conditions will improve ..." the builder wrote in its court filing.

...

The liquidation plan could be approved by a judge in Fort Lauderdale in a few months, Singerman said. Even after that process is complete, the builder may continue operating on a limited basis during the next 12 months as part of a deal it reached with lender Wachovia Bank last year.

Wachovia agreed to provide Levitt and Sons with as much as $10 million to complete and sell between 80 and 350 homes in northern Florida, Georgia and South Carolina.

Original Writeup

From this article comes a suitable introduction to Levitt, a storied company of over 60 years:

Levitt and Sons, based in Fort Lauderdale, was one of the largest home builders in the Southeast and the developer of one of America's first suburbs, New York's Levittown.

In an inglorious end, Levitt filed for Chapter 11 protection on Nov. 9, 2007, done in by the housing market decline. It listed assets of $411 million and liabilities of about $499 million. Major creditors include Wachovia, Key Bank, Regions Bank, AmTrust, and Bank of America, which together are owed $233.7 million by the builder.

Levitt's gross revenue for 2005 was $505 million, according to BuilderOnline.

The company which, by many accounts, created the modern suburban subdivision, and which had weathered so many housing bear markets, couldn't take this one. Perhaps then it is fitting Levitt has gone to sleep permanently—a fate the sprawled suburb itself may repeat, as gas and oil prices continue to rise relentlessly.

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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.