Is WCI Communitites Bankrupt?

Rumor has it that WCI Communities will file for bankruptcy.

WCI Communities Inc., the Florida homebuilder whose chairman and largest investor is billionaire Carl Icahn, fell 53 percent in New York trading on concern that the company is in danger of filing for bankruptcy.

"The situation is dire; the company can't meet financial covenants on its bank debt and it can't survive without borrowing," Vicki Bryan, an analyst with Gimme Credit LLC in Friendswood, Texas, said in a report yesterday. "Without covenant relief, all of WCI's $1.9 billion debt will cascade into default and it could tumble into bankruptcy."

As much as I never wish anyone or any company to enter bankruptcy, it is probably necessary that at least one homebuilder go bust to begin the cleansing process so the market can bottom.

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Comments

[BILLYJAMES:]

SINCE AL HOFMAN IS RETURNING FROM PORTUGAL, I EXPECT THIS COMPANY TO REBOUND.

COMMENTS?

2008 Jan 14 01:43 PM

[kurt walter:]

WCI is a good company in a horrible business right now -- florida real estate.

2008 Jan 14 02:27 PM

[User 139936:]

great company with a good name in a bad market. lots of great talent running the real estate brokerage. Good luck to all

2008 Jan 14 06:05 PM

[StockBoy2:]

They over-built and over-priced fare beyond the market relying on massive advertising campaigns and promotion, not value to sell their product. It is not a good company by any measure.

2008 Jan 15 10:50 AM