X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(Carl Cronan is editor of Real EstateFlorida.)

BONITA SPRINGS, FL-In an expected move given the current state of the nation’s housing market, WCI Communities Inc. filed for Chapter 11 reorganization under the US Bankruptcy Code on Monday. The company, which is involved in numerous upscale condominium developments throughout Florida, says it plans to operate as usual during its restructuring process.

“The filing became necessary because of the recent failed effort to obtain financing and the recognition that the company’s entire $1.8 billion of debt may soon be in default,” WCI Chairman Carl Icahn stated in a release. He added that the last straw occurred when holders of the company’s $125 million in convertible notes that were due Tuesday rejected an earlier exchange offer that would have paid a higher interest rate in five years.

Among the first management changes to result from the restructuring is the appointment of David L. Fry as interim president and chief executive officer, replacing Jerry L. Starkey, who has served as CEO the last three years. Fry has been with WCI since 1995 and became its chief operating officer last November.

GlobeSt.com previously reported that a buyout or bankruptcy appeared to be the only remaining options for WCI after it dissolved a special committee formed in June to review and evaluate proposals regarding its future, including the possible expansion of Icahn’s current 14.5% stake in the company. Bonita Springs-based WCI plans to build 15,000 homes along the East Coast at prices up to $10 million.

Prior to Monday’s bankruptcy filing, WCI reached a definitive agreement with principal lenders giving the company access to at least $50 million cash on hand to continue operating on an interim basis, subject to court approval. It also has a proposal by senior lenders to provide another $100 million through a debtor-in-possession loan facility.

“Day-to-day operations will continue as usual, while we work with our stakeholders to restructure the balance sheet,” Fry stated. “We will continue to sell, build and deliver homes without interruption. Construction and sales activities will continue; employees will come to work and be paid.”

WCI has land positions through Florida, particularly along the Gulf Coast from Tampa to Marco Island, with additional sites in South Florida, Palm Coast, Jacksonville Beach and Perdido Key. Its other developments are primarily within the metropolitan areas of New York City and Washington, DC.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.