Wednesday, August 06, 2008

WCI Files for Chapter 11 Bankruptcy


It seems not even development giants can dodge the vicissitudes of the market. Bonita-Springs, Florida-based luxury home and tower developer, WCI, announced Monday that they have filed for Chapter 11 bankruptcy and will petition to restructure their debt and capital. They followed that announcement yesterday with news that Chief Judge Keven J. Carey of the U.S. Bankruptcy Court, "approved a package of relief designed to facilitate and ensure the continued and uninterrupted operation of WCI's business."

WCI's closest project is The Club on Quincy (pictured, at left) at 3901 N. Fairfax Boulevard in Arlington. The project has been on hold, but is planned as a approximately 125-unit, 12 story condo building one block from Quincy Park, on the site of the parking lot of the Arlington Funeral Home in Ballston. A representative for the company said that project will remain on hold until the "market improves."

The company cites the poor shape of the market as the reason for their financial troubles; WCI accumulated a number of unsold properties because of both purchase cancellations and defaults on existing sales. Under Chapter 11, WCI will be able to reorganize their finances and come up with a plan to keep their business running and pay off their debts and blocks other companies and individuals from collecting debts owed by the company.

WCI maintains that they are "absolutely not" going out of business and will use their granted $50 million in cash collateral to meet "immediate obligations to suppliers." According to their press release, "The company said Realtors, brokers and customers will see no interruption in these (brokerage, foreclosure, and rental management) services."

Sitrick and Company, known for its work in "sensitive situations", is doing PR for the WCI while they work through their bankruptcy. WCI's website optimistically cites Delta Airlines, Macy's, and 7-Eleven as other companies that made it through Chapter 11 situations.

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