FORT LAUDERDALE, Fla. – Nov. 12, 2007 – On Friday, Florida homebuilder Levitt and Sons LLC announced that the company and 37 of its subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code.

The move severely impacts homebuyers who put down deposits on new homes if they have not yet closed. Construction has stopped and, according to the builder’s Web site, it’s not yet clear what will happen to buyers’ deposits and “if or when previously postponed closings on completed homes will occur.” Levitt and Sons is the homebuilding subsidiary of Levitt Corporation, which continues to conduct normal business along with its other principal subsidiary, Core Communities.

“For the past several months, Levitt and Sons has been involved in intense negotiations with its bank lenders in an effort to restructure its debt and obtain appropriate funding to complete unfinished homes and other projects that were suspended due to the company’s financial condition,” the company says in a release. “These negotiations have not been successful to date but remain ongoing.” But the release says it “seems unlikely that Levitt and Sons will be in a position to return to business-as-usual.”

“Through the Chapter 11 process, we seek a mechanism that will facilitate the completion of some unfinished homes,” says Lawrence E. Young, who was named Chief Restructuring Officer. “Likewise, we seek a resolution that will allow closings to take place promptly for previously completed homes.”

Recent homebuyers may also face legal problems, and some have reported liens placed against their new homes by subcontractors who did work but were not yet reimbursed by Levitt and Sons. According to the release, the company cannot satisfy these liens.

Recent homebuyers with construction problems have also lost one of the benefits to buying a new property – the home warranty. “Because of the Chapter 11 protection, Levitt and Sons cannot honor warranties,” the company says. “You will need to make your own arrangements for repair work.”

Levitt and Sons’ legal counsel for its Chapter 11 cases is Berger Singerman, P.A. Additional information about the filing is available on the company’s Web site: www.LevittandSons.com. Customer information is also available at (877) 538-4889. Vendor information is available at (888) 538-4893.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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