JPMorgan Seeks to Put KB Home Project Into Bankruptcy

Discussion in 'Wall St. News' started by ASusilovic, Dec 10, 2010.

  1. Dec. 10 (Bloomberg) -- JPMorgan Chase Bank NA is trying to force a $1.55 billion Las Vegas-area development into bankruptcy, saying affiliates of builders KB Home, Beazer Homes USA Inc., and Toll Brothers Inc. mismanaged the project.

    JPMorgan filed an involuntary bankruptcy in Las Vegas yesterday accusing the three builders and five other investors in South Edge LLC of employing a “hostage-ransom strategy” to avoid liability for a $585 million loan.

    A unit of KB Home owns 48 percent of South Edge, which controls the 2,000-acre Inspirada residential and commercial development in the Las Vegas suburb of Henderson, according to court documents. The rest of South Edge is owned by the other investors, including units of Toll Bros. and Beazer.

    JPMorgan asked the U.S. Bankruptcy Court to appoint a trustee to take control of South Edge and the project. The eight owners are refusing to put $270 million into the project as they promised, the bank said in court papers.

    “These insiders are sacrificing the project and repudiating debtor’s obligations in a quest for great profits at the expense of not only approximately 39 lenders to whom the insiders seek to shift their losses, but also to the city of Henderson,” JPMorgan said in court papers filed yesterday.

    Calls today to Los Angeles-based KB Home before business hours; Toll Brothers, based in Horsham, Pennsylvania; and Beazer Homes, based in Atlanta, weren’t immediately returned.

    Ay,ay, ay...JP Morgan accusing builders of being "insiders"...Fascinating.
  2. Who's worse?....bankers or builders? :confused: :( :D
  3. Builderbankers?
  4. Nazz,

    in comparison to Ben Bernanke and his "dream team, I have a lot of respect for bankers and builders. Why is nobody from the political elite attacking this guy like Ron Paul ?Bernanke will lead us all into catastrophe.
  5. Unfortunately, they are a "political" elite, not a "leadership" elite. :( :mad:
  6. ammo