WCI Communities (WCI) Files Chapter 11; Starkey Out As CEO
WCI Communities, Inc. (NYSE: WCI) announced that it and approximately 130 of its wholly-owned subsidiaries had filed voluntary petitions to restructure their debt and capital.
Carl C. Icahn, chairman of WCI's Board of Directors said, "The company, with all diligence, has attempted to avoid a bankruptcy filing. However, the filing became necessary because of the recent failed effort to obtain financing and the recognition that the company's entire $1.8 billion of debt may soon be in default. This was confirmed when certain holders of the company's $125 million convertible notes informed the company that they rejected its exchange offer and instead insisted on being paid in cash in full on August 5, 2008."
WCI also announced that it and Jerry L. Starkey, who served as WCI's chief executive officer since 2005, mutually determined that, with the company going in a new direction and operating in bankruptcy, it is time for new leadership at the CEO level. Accordingly, Mr. Starkey will leave the company effective immediately.
David L. Fry, 48, has been appointed by the Board to act as interim president and chief executive officer, pending the selection of a permanent CEO.
WCI said it remains cash-flow positive and day-to-day operations will continue as usual. They also said they will continue to sell, build and deliver homes without interruption.
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