Homebuilder TOUSA Files Chapter 11 Bankruptcy

Homebuilder TOUSA Inc., which has been operating under bankruptcy protection since January, said Tuesday it has filed its plan of reorganization with the bankruptcy court.
The plan would convert more than $300 million in second-lien debt to equity and do away with about $1 billion in bond debt and another $600 million of unsecured obligations, the company said.

TOUSA also would issue new debt with the aim of fully paying off claims by first-lien bank creditors and partially paying claims for second-lien bank creditors, although both payouts would be subject to the outcome of pending litigation.

Holders of TOUSA common stock would not receive anything under the reorganization plan.
The company expects to have between $125 million and $145 million in cash once it emerges from bankruptcy.

TOUSA Chief Executive John Boken said the plan would allow the builder to emerge from Chapter 11 "with a stronger balance sheet and greater financial flexibility that will position TOUSA to compete effectively in the industry and to continue to deliver quality homes to our customers."

The builder said affiliates Universal Land Title Inc., Preferred Home Mortgage Co. and Alliance Insurance and Information Services will remain part of the company once it emerges from bankruptcy.

TOUSA has operations in 10 states. It filed for bankruptcy protection in January, citing the flagging sales as the housing slump worsened. It filed its plan with U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division.