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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (123331)	5/15/2008 5:17:29 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

During the last down-turn Kaufman & Broad filed a package bankruptcy wiping out shareholder equity and much of their debt, the assets becoming KB Homes under the same Kaufman & Broad management (if you could call them that). I think it's clear that many more firms will do the same thing during this downturn, wiping out their shareholders. Lennar has recently taken some huge hits. Major assets on their balance sheet have become instantly worthless as their partners pulled out, such as their fiasco with Newhall Land with Cerberus and Calpers. So it's tough to know how solvent a homebuilder is by looking at their balance sheet, since it can change overnight. I don't know that much about the solvency Beazer's projects. That's the key, along with the triggers in their lending agreements. .