Wednesday, April 1, 2009

Comstock Homebuilding may seek bankruptcy protection

Says may be forced to seek bankruptcy protection
* Comstock Homebuilding Cos inc accounting firm expressed going concern opinion
* Comstock Homebuilding Cos inc Says chosen not to make interest payment on some debt
* Comstock Homebuilding Cos inc Says working on plans to shore up balance sheet
* Comstock Homebuilding Cos inc Says attempting further restructuring of company's debt

Real estate company Comstock Homebuilding Cos Inc (CHCI.O) warned that it may have to seek bankruptcy protection if its efforts to generate free cash flow and restructure debt with its lenders proved unsuccessful.

Comstock also said its accounting firm PricewaterhouseCoopers believes declining market conditions create substantial doubt that the company would continue operating throughout 2009 as a going concern.

Comstock said sales during the first quarter remained weak as general economic conditions in its three primary markets continued to generate low levels of consumer demand for new home sales.

The company has also chosen to default on the March 31, 2009, interest payment of about $218,000 due on its senior unsecured debt to JP Morgan Ventures, due to limited liquidity.

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