November 10, 2007 / 12:02 AM / 10 years ago

Levitt & Sons files for bankruptcy protection

NEW YORK (Reuters) - Levitt Corp LEV.N home-building unit Levitt & Sons said on Friday that it had filed for bankruptcy protection, reflecting the badly battered Florida market.

The unit, which made most of its money in Florida, said Chapter 11 filing in U.S. Bankruptcy Court in the Southern District of Florida, was made “in response to unprecedented conditions in the home building industry, which have severely impacted the company.”

Levitt & Sons is ranked as the 50th-largest U.S. home builder by trade publication BuilderOnline. But the malaise in the broader U.S. housing market ultimately could threaten the financial viability of larger builders, Agency Trading Group analyst Alex Barron said.

“The market is very, very tough right now. Of all the markets in the country, Florida was the hardest hit because of the number of speculators,” Barron said.

He said he was also concerned about other Florida-centric builders such as WCI Communities Inc WCI.N and TOUSA Inc. TOA.N.

But larger builders also spent much money and time during the height of the boom building up their land positions in Florida and on the West Coast, another very hard-hit market.

“California is probably the number two hardest hit market. Builders who have a presence in both are next in line,” he said.

Levitt first made its mark in Long Island, New York, where after World War II, Abraham Levitt and his company built huge tracts of affordable homes for returning veterans ready to start families. Levittowns in Long Island and Pennsylvania are named after him.

The filing is the latest sign of the serious downturn in the U.S. housing market, where lax and abusive lending practices in recent years have resulted in rising mortgage delinquencies, falling home prices and stagnant sales.

Separately on Friday, Levitt Corp said it swung to a loss in the most recent quarter as a result of the slump.

Fort Lauderdale, Florida-based Levitt Corp reported a third-quarter loss of $169.2 million, or $8.37 a share, compared with net income of $3.0 million, or 14 cents a share, a year earlier. (Reporting by James B. Kelleher and Ilaina Jonas)

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