Florida-Based WCI Communities Files For Bankruptcy Protection

Miami, FL (AHN) - WCI Communities Inc. joined an increasing list of housing market casualties on Monday, filing for Chapter 11 bankruptcy protection after failing to secure enough financing to stay in business.

The homebuilder filed when it was unable to meet a deadline for a $125 million restructuring of convertible bonds.

"The company, with all diligence, has attempted to avoid a bankruptcy filing. However, the filing became necessary," said Carl Icahn, according to Reuters. Icahn, who serves as chairman of the board, owns 15 percent of the company, which he purchased at $19 a share.

WCI had received loan extensions from Bank of America and Keybank. However, the company was denied the opportunity to exchange existing bond debt for new bonds and stock warrants by other creditors.

"We need to restructure our debt and bring our capital structure in line with today's marketplace realities. We believe Chapter 11 provides the most efficient and timely process for accomplishing this," said Interim CEO David Fry, according to the Associated Press.

The company said daily operations will remain intact and employees will still come to work and be paid during the bankruptcy proceedings.

With roughly 70 percent of its properties located in Florida, WCI saw large declines in housing values as the region was one of the hardest hit by the nationwide mortgage crisis.