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Seasons on Lanier developer files for bankruptcy

Work on adult community was halted last month

POSTED: November 14, 2007 5:05 a.m.
Levitt and Sons LLC announced Friday that the company and 37 of its subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code.

The filings were made in the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale.

The company is the developer of Seasons on Lanier, a planned residential community for adults age 55 and older. The Browns Bridge Road development has a number of homes already completed and others in various stages of completion. Work at the site was halted last month after the company could not pay approximately $2.6 million of interest payments due to its five lenders on Oct. 10.

The development of Seasons brought visible changes along Browns Bridge Road. The entrance to the development included a large waterfall cascading over towering boulders. That feature now sits idle.

The community was gated and was to include amenities such as tennis courts and a marina on Lake Lanier.

There have been reports that customers at Seasons, who had already made substantial down payments, have been unable to close the transactions and move in. A number of homes already are occupied.

The parent company, Levitt Corp., refused in October to extend any further credit to Levitt and Sons.

Through Sept. 30, Levitt Corp. had loaned approximately $84 million to Levitt and Sons to enable the firm to meet its cash requirements through that date.

The bankruptcy filing does not include Levitt Corp. and its other principal subsidiary, Core Communities.

In a news release issued Friday afternoon, the company explained the action was taken in response to unprecedented conditions in the home building industry, which have severely impacted the company.

"This downturn has been particularly sudden and steep in Florida and in the Southeastern United States — the markets in which Levitt and Sons operates," the statement said.

Company officials said that for the past several months, Levitt and Sons has been involved in intense negotiations with its bank lenders in an effort to restructure its debt and obtain appropriate funding to complete unfinished homes and other projects that were suspended due to the company’s financial condition.

The company said that while negotiations have not been successful to date, they remain ongoing.

Effective Oct. 22, the company named Lawrence E. Young as chief restructuring officer, a new position. Young, who is with AP Services and a managing director at AlixPartners, will oversee Levitt and Sons’ Chapter 11 cases and related matters.

"We deeply regret the impact the Chapter 11 filing of Levitt and Sons will have on homeowners, vendors and employees," Young said. "We remain mindful of Levitt and Sons’ customers whose homes have not yet been completed. Through the Chapter 11 process, we seek a mechanism that will facilitate the completion of some unfinished homes."

He said the company would seek a resolution that will allow loan closings to take place promptly for previously completed homes.

He said the company will explore the potential sale of all or some of Levitt and Sons’ assets.

Levitt has already scrapped plans for a 650-unit senior community in Peachtree City and is pulling out of the Memphis, Tenn., area after a similar move in Nashville in 2006.

In September, Levitt announced that it was laying off 200 workers, almost one-third of its workforce.



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