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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: John Vosilla who wrote (23423)2/12/2005 1:07:19 AM
From: Elroy Jetson  Read Replies (1) of 116555
 
That's quite a funny press release from May 1999 which shows a lot about the home building business.

Bill Lyon went from the richest man in California, based on his land assets and his stake in the William Lyon Companies, to completely broke in 1994 with just his home. The bankruptcy trustee even took his wife's wedding ring. The William Lyon Company folded completely. Of course he still had his monthly pension as a retired Major General in the Air Force.

Then Bill Lyon and his son start a new little company, William Lyon Homes. Miraculously, in under five years, they are "selling" their tiny company to Presley Development for "$48 million" - and at the same time found the money to buy 50% of the stock in Presley Development. Where did the money come from?

Under terms of the deal, Lyon would raise his ownership stake in Presley to between 49% and 49.9%, securing his control of that company. Then, Presley would acquire the assets of his Lyon Homes for $48 million.

Bill Lyon's backers included another ex-Presley board member and the Blackstone Group, if memory serves correctly. Blackstone is one of the firms which make money on home builders while the home builder shareholders get their clocks cleaned.

Here's a little website that hasn't been changed since before Bill Lyon and William Lyon Companies went broke - not to be confused with the new company William Lyon Homes.

bhhs.beverlyhills.k12.ca.us

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