(Carl Cronan is editor of RealEstateFlorida.)

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BONITA SPRINGS, FL-In an expected move given the current stateof the nation's housing market, WCI Communities Inc. filed forChapter 11 reorganization under the US Bankruptcy Code on Monday.The company, which is involved in numerous upscale condominiumdevelopments throughout Florida, says it plans to operate as usualduring its restructuring process.

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"The filing became necessary because of the recent failed effortto obtain financing and the recognition that the company's entire$1.8 billion of debt may soon be in default," WCI Chairman CarlIcahn stated in a release. He added that the last straw occurredwhen holders of the company's $125 million in convertible notesthat were due Tuesday rejected an earlier exchange offer that wouldhave paid a higher interest rate in five years.

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Among the first management changes to result from therestructuring is the appointment of David L. Fry as interimpresident and chief executive officer, replacing Jerry L. Starkey,who has served as CEO the last three years. Fry has been with WCIsince 1995 and became its chief operating officer lastNovember.

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GlobeSt.compreviously reported that a buyout or bankruptcy appeared to bethe only remaining options for WCI after it dissolved a specialcommittee formed in June to review and evaluate proposals regardingits future, including the possible expansion of Icahn's current14.5% stake in the company. Bonita Springs-based WCI plans to build15,000 homes along the East Coast at prices up to $10 million.

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Prior to Monday's bankruptcy filing, WCI reached a definitiveagreement with principal lenders giving the company access to atleast $50 million cash on hand to continue operating on an interimbasis, subject to court approval. It also has a proposal by seniorlenders to provide another $100 million through adebtor-in-possession loan facility.

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"Day-to-day operations will continue as usual, while we workwith our stakeholders to restructure the balance sheet," Frystated. "We will continue to sell, build and deliver homes withoutinterruption. Construction and sales activities will continue;employees will come to work and be paid."

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WCI has land positions through Florida, particularly along theGulf Coast from Tampa to Marco Island, with additional sites inSouth Florida, Palm Coast, Jacksonville Beach and Perdido Key. Itsother developments are primarily within the metropolitan areas ofNew York City and Washington, DC.

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