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WCI Communities files for bankruptcy Beazer next


Icahn-led WCI Communities files for bankruptcy
Monday August 4, 2:16 pm ET
By Helen Chernikoff

NEW YORK (Reuters) - Home builder WCI Communities Inc (NYSE:WCI - News) filed for Chapter 11 bankruptcy protection after failing to obtain financing to stay afloat, chairman Carl Icahn said on Monday.
"The company, with all diligence, has attempted to avoid a bankruptcy filing. However, the filing became necessary," said Icahn, who owns about 15 percent of the company, or about 6 million shares.

On Monday, WCI's stock plunged 48 percent to 66 cents a share, a far cry from the $22 per share that Icahn offered for the company in March 2007. Icahn bought his stake in WCI in early 2007 for about $19 per share


Beazer Homes USA Inc (NYSE:BZH - News) is the builder most likely to declare bankruptcy next, Bryan said. When Beazer reports its third-quarter earnings on Friday, the company will probably reveal such significant write-downs on land that's losing value that it might trip the covenants its banks have set determining its minimum tangible net worth, she said.

"Beazer to me is the next weak sister," Bryan said.

Beazer did not immediately respond to requests for comment on Bryan's statement.

  • August 04 2008 - US
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