Levitt and Sons - Screwed and Screwing People - Levitt's Future Uncertain

From the Orlando Sentinel (today). Wow, I feel bad for these people. Message on Levitt Homepage reads: On November 9, 2007, Levitt and Sons filed for Chapter 11. We deeply regret the impact this will have on homeowners, customers, vendors and employees. Existing customers are welcome to call the customer hotline at 877-538-4889. Existing vendors are welcome to call 888-538-4893. Additional information is available at the following link:Chapter 11 Information. Article follows:

The financial collapse of one of America's legendary home builders has left people throughout Central Florida stuck with unfinished houses, liens against their properties, unopened clubhouses and community pools, and warranties that could be worthless.

Many of the victims, scattered throughout the Southeastern United States, don't know whether their houses will ever be finished." We're just kind of in limbo here and waiting to hear," said Vincent Santanelli, a resident of Cascades at Groveland who helped his elderly father-in-law with a $20,000 down payment on an unfinished house in the Lake County community.

"We haven't even heard a word from Levitt. "In Central Florida alone, several hundred families purchased lots and homes in communities from St. Cloud to Winter Springs that remain unfinished. Levitt and Sons hasn't offered them much reassurance.

A company Web site says Levitt's future is uncertain, the status of homeowners associations that it previously ran is "not yet clear" and it can no longer honor home warranties.Homeowners seeking work under warranty would have to go directly to vendors who provided items such as flooring. With only 72 employees left out of about 500, Levitt and Sons "just does not have the resources to continue to serve as intermediary," said Paul Singerman, lead bankruptcy counsel for the builder. Levitt filed for Chapter 11 bankruptcy protection Nov. 9, citing excess housing supply, reduction in demand resulting from less credit availability and falling prices.

The company listed assets of less than $1 million and debts of more than $100 million.Residents say they never expected this from the builder that pioneered the suburban planned community with Levittown on Long Island in 1949."They had a good reputation," said Kerri Day, who, with husband Robert Walker, bought a $450,000 home in Turtle Creek in St. Cloud. Their home is finished, along with about 20 others in the community planned for more than 400 homes.

Though relatively small when compared to today's home-building companies, "the Levitt name carries a lot of weight in the industry," said Mike Larson, a real-estate analyst with Weiss Research in Jupiter. "It's a sign of the times that even a company like that could get to this level of stress."Other smaller builders have filed for bankruptcy, and TOUSA, whose home-building companies include Engle Homes, is considering a possible Chapter 11 filing. Levitt and Sons' unfinished communities in Central Florida include Jesup's Reserve in Winter Springs and Cascades at Groveland.What happens to the homeowners associations and common areas in those communities will be "decisions that the lender makes . . . who's got mortgage liens on the property," Singerman said.

Levitt is going to try to reach an agreement with lenders to sell partly completed developments to other investors, he said. Levitt already has received permission to return deposits made by customers after Aug. 29 on homes that remain substantially incomplete. On other homes, it would be up to lenders to decide whether to return other deposits or try to finish the work.Concepts in Greenery, an Orlando landscaping company, has filed liens against common areas where it had done work. The company had to lay off 20 of its employees -- about half its staff -- as a result of not getting paid by Levitt, said

Steve Brownley, Concepts in Greenery's vice president .Levitt, he said, owes the company about $700,000. "We definitely have scaled back our operations, which we have never done in 30 years of being in business," Brownley said. "We have never laid anybody off, ever."Singerman said he did not know Tuesday how many liens had been filed against Levitt and Sons. Some of them have been filed against individual homeowners' properties. Residents and vendors working with Levit said they began to get an inkling a few weeks before the bankruptcy filing of just how bad things were getting.

"Work seemed to be slowing down," Santanelli said.Monday night, about 200 Cascades residents appeared in front of the Groveland City Council requesting financial relief -- primarily a break on water bills so they can water the landscaping in common areas. At least 40 customers have put down deposits but don't yet have houses completed, resident Eric Sorkin said.At Jesup's Reserve, the pool and cabana are off-limits because construction is incomplete. A "No trespassing" sign warns residents that the area is a construction site and that entering it without permission is a felony.

Resident Maggie Martin fears a closed cabana and pool will be "a tremendous drain" on property values. With almost 70 units of a planned 161 complete, there should be enough money coming in from association dues to keep things running for a while. "I think they can limp along" and raise enough money to pay for maintenance of common areas, said Matt Jordan, a property manager with Specialty Management"We want to at least maintain the bare minimum," Martin said.

But the situation is more precarious in Turtle Creek, with only a few homeowners around to pay the bills through their monthly assessments. The budget calls for $18,000 a month to be spent on landscape maintenance.Jordan said he's not "getting the direction I'd like" from Levitt and residents are "scared to death."