Sounds like a few bitter contractors or unhappy homeowners, but I share the view this company will have to merged into another one for $0. They will have difficulty getting avoiding a going concern. If you are contractors, you will have to find another leeming to work for. I have lent to and worked as a CFO for a troubled builder before. They get desparate after awhile.
Anyway, here are the things you need to know. The cash flow for the period ending 30/6/10 shows the folloiwng. Cash flow from operations, $15M (down from $43M the period before). They made investments in projects of $94M. They repaid $5.4M in debt and cash dropped by $86M.
I am taking bets for a filing or sale for nothing. So, I'll be buying the puts for March.
I can't belive it is trading. Builders in this position will do whatever it takes to sell a home. The margins are okay, but they just isn't enough volume for any significant coverage of overheads.
The real reason for a decrease in Texas they will never disclose.
Here are some of the following facts:
Failure to timely pay subcontractors.
Failure to honor warranty agreements forcing homeowners to threaten legal action.
Use of non documented workers through subcontractors, this goes back to substandard product. Actually saw a 10 minute class for some clowns on cutting and installing rafters. Then the guy giving the instruction left.
This company is about one thing and that is not building or providing anything of quality.