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Real Estate Related Companies Hit By the Crash



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By : Andy Denton    99 or more times read
Is it the survival of the fittest or the safest?

Real estate companies and those businesses related to property, construction and design have felt the wrench of the crisis last year. According to BankruptcyData.com, five real estate-related companies are among the top 20 largest public company bankruptcy filings to date. Obviously, the lackluster sales hurt much of their balance sheets along with tight credit markets and the general downturn in the housing market. Leading the losers in 2008 are:

Luminent Mortgage Capital Inc.: The San Francisco-based real estate investment trust firm had $4,721 worth of assets upon its Chapter 11 filing in September.

WCI Communities, Inc.: The homebuilding and real estate services company from Bonita Springs, CA was once awarded by the National Association of Homeowners as “America’s Best Builder” in 2004. Too bad, there was no buyout deal that transpired to save this builder.

TOUSA Inc.: The firm was in distress 12 months ago when thirty-nine debtors found themselves filing voluntary petitions for relief.

Linens N’ Things, Inc.: Their home furnishings weren’t a good fit to the economy. The company which was valued at $1,740 upon filing, hasn’t opened its stores since the last week of December.

Tropicana Entertainment, LLC: Las Vegas not only leads in the highest drops in property values, its hotel casinos fell victim too. Tropicana’s properties couldn’t step up to the hammering in the economy that forced its CEO William Yung to vacate his post. Other companies that succumbed to the downturn include:

Ciena Capital LLC: Unfortunately, the loan provider needed to reorganize to salvage its own capital. The Chapter 11 filing was done in late September. Comfort Co. The New Jersey beddings manufacturer experienced financial nightmares after it filed for bankruptcy last October. As of now, its operations are financed by JP Morgan Chase’s $35 million debtor-in-possession loan.

Domain Home Furnishings: Before dropping the curtains , the reduction in company credit and supplier payment delays finally brought the house down. Twenty-three years in the business with an achievement of $60-million in revenue is now history.

Empire Land Co.: The Ontario development firm experienced its worst end last April after declaring $500 million in debt. According to Tehachapi News , "A severe tightening or loss of financing for the entitling and development of land and the resulting pressures that were placed on the debtors' cash flows, resulted in the action,” according to a statement by CFO Neil Miller in court documents.”

Laketown Wharf: Days after it signed over unsold units to a bank, the developer filed bankruptcy last September – another catastrophe in the high-rise industry. Land Resource, LLC: The coastal developer from Atlanta has liabilities of $214.8 million during its filing last October. The management blames the bank’s refusal to grant loans to its potential buyers as the cause of their losses.

Landsource: This California property developer couldn’t restructure the $1.24 billion of debt that it incurred over the housing mess when property values in Southern California plummeted further.

Kimball Hill: According to Michael Commerford of Daily Herald, Kimball Hill has several projects under way in the Chicago suburbs, including Sugar Grove, where 2,470 homes on 1,300 acres are planned for Settlers Ridge.” In April, the homebuilder firm asked for debt reorganization that totaled $631.9 million as of December 2007.

SIRVA, Inc.: Moving services companies were also hit and this Westmont, IL firm was one of the first casualties in February. With fewer home transfers, it experienced the biggest drop in revenues. Thanks to the successful reorganization plan that ended its bankruptcy status. SIRVA, Inc. is now a private company.

Taro Properties: J. Craig Anderson of the Arizona Republicwrites, “In June, Taro Properties Arizona was facing foreclosure on three land holdings, two in Gilbert and the other in Phoenix, totaling 1,251 parcels and $75.3 million in mortgage loans. Its creditors include Bank of America, which initiated foreclosure proceedings on 493 vacant lots owned by Taro inside the Cooley Station North subdivision in Gilbert.” Foreclosures hurt the company and its two affiliates.

Vail Plaza Development: The luxury resort and condominium developer suffered from a number of setbacks last year including loan security. The result? $39.6 million in debt and a Chapter 11 filing in October.

Woodside Group: The Utah-based homebuilder defaulted on $400 million of loan. Foreclosures were a major concern from the start until housing supply spiked.
Andy Denton is the COO of www.Realty.com.

Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com.


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