Levitt and Sons creditor asks court to reconsider DIP facility approval

By Caroline Salls

Pittsburgh, Feb. 26 - Levitt and Sons, LLC creditor Phillips and Jordan, Inc. is asking the U.S. Bankruptcy Court for the Southern District of Florida to reconsider its order approving debtor-in-possession financing from some of Levitt's subsidiaries, according to a Monday court filing.

Phillips and Jordan said the DIP loan approval "constitutes clear and manifest injustice" because the court should not have entered the order without determining whether sale proceeds covered in the DIP agreement would exceed the value of Levitt's properties and all liens on the property, including Phillips and Jordan's and other secured liens.

According to the motion, improper evidence was presented to the court on the value of the property in question, and Phillips and Jordan and other lienholders were not given proper notice of the related valuation hearing.

As a result, Phillips and Jordan said the DIP loan approval strips its liens without evidence or sufficient notice.

As previously reported, Levitt and Sons debtors Levitt and Sons of Cherokee County, LLC; Levitt and Sons of Hall County, LLC; Levitt and Sons of Paulding County, LLC; Levitt and Sons of Horry County, LLC; Levitt and Sons of Manatee County, LLC; and Levitt and Sons at World Golf Village, LLC received court approval of the $3.5 million in DIP financing from Wachovia Bank NA on Feb. 13.

Proceeds will be used to resume housing construction and sales. Net sale proceeds will be used to pay on the loan.

Levitt and Sons, a Fort Lauderdale, Fla.-based homebuilding subsidiary of Levitt Corp., filed for bankruptcy on Nov. 9. Its Chapter 11 case number is 07-19845.

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