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Housing

WCI Raises Black Flag, Skull & Crossbones (WCI)

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Updated Published

Wci_logo_2We have yet to see public homebuilders file for Chapter 11 bankruptcy protection.  WCI Communities Inc. (NYSE: WCI) is the first of the former large homebuilders to file for bankruptcy protection.  The homebuilder has noted that some 130 of its subsidiaries have filed petitions to restructure their debt and capital.  Guess who its Chairman is… CARL ICAHN.

Icahn said the company has tried to avert this filing but recentfailure to obtain financing and the realization of the $1.8 Billion indebt soon to be in default are the primary reasons.  Convertible noteholders (of $125 million) rejected an exchange offer for common stockand demanded cash effective August 5, 2008.  CEO Jerry Starkey is alsoleaving the company and David Fry has been appointed interim President& CEO.

What is interesting about WCI is that this has been one of the "mostat-risk" of all the public homebuilder stocks.  Carl Icahn at one pointsaid that bankruptcy was not an assured outcome on a CNBC interview andthat caused a sharp rally in this stock at the time and Jim Cramernoted this as well earlier this year as one to watch based upon Carl Icahn.  In retrospect, that will be referred as the sucker bet.

As a reminder, Billionaires involved in companies are probably going tolook out for themselves first.  If that isn’t the case, that’s at leastwhat shareholders may think.

Jon C. Ogg
August 4, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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