Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Lennar Corporation    LEN

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

LENNAR A : Lennar provides more data on joint ventures

share with twitter share with LinkedIn share with facebook
share via e-mail
0
01/12/2009 | 08:37pm CET

No. 2 U.S. homebuilder Lennar Corp again denied on Monday treating its joint ventures like a "Ponzi scheme" and tried to counter the allegation by providing fresh data on those ventures.

By Helen Chernikoff and Scott Malone

The statement came in response to accusations made last week by Barry Minkow, who had served time in prison for stock fraud but now investigates fraud. The accusations were made in a letter to the U.S. Securities and Exchange Commission.

Those charges pounded the Miami-based company's shares down 20 percent on Friday. The shares were down another 7.2 percent at $8.49 during afternoon trading on the New York Stock Exchange on Monday amid a broad decline in homebuilder shares. The Dow Jones U.S. Home Construction Index <.DJUSHB> fell 5.7 percent.

"While it is not Lennar's practice to respond to false and scurrilous allegations in the context of litigation, Lennar has a responsibility to its shareholders and the public to respond to their legitimate requests for information," the company said in a statement.

Lennar denied the allegation by Minkow, a California pastor who now works for The Fraud Discovery Institute, that the builder had used its joint ventures as a "Ponzi scheme," using older ventures to fund new ones. Minkow made his allegations on the Web site www.frauddiscovery.net.

Minkow also claimed Lennar had violated a written agreement and wired one of its subsidiaries $37.5 million from "The Bridges," a high-end California housing and golf joint venture between Lennar and an entity that later become Briarwood Capital LLC.

Lennar denies the charge and counters that Minkow is working for Nicolas Marsch, who contributed the $37.5 million and whose civil litigation against Lennar was recently dismissed by a California Superior Court judge.

On Friday, Lennar said the accusations were "false and inflammatory" and said it was investigating possible wrongdoing by Marsch and Minkow, saying they may have tried to illegally obtain information relating to Marsch's legal proceedings against Lennar.

The company said in its Monday statement that it would take "appropriate action against the responsible parties" but could not be reached to explain what actions it might take, whether they would include a libel suit and against whom.

Minkow also had accused Lennar of improperly giving its chief operating officer, Jon Jaffe, a mortgage and of profiting from the now bankrupt "LandSource" venture while the California Public Retirement Fund (CalPERS) lost about $1 billion.

In its statement, Lennar denied that it gave Jaffe a mortgage and acknowledged that Jaffe did use a line of credit secured by a mortgage to buy Lennar stock.

Minkow's claim that Lennar caused the other LandSource investors and lenders to lose money is false, the company stated.

"The lenders and investors are large institutional entities who conducted their own extensive due diligence with the aid of independent experts," Lennar said.

JOINT VENTURES

Wall Street analysts have long lamented Lennar's extensive use of the joint venture land-buying structure, which requires a relatively low level of official disclosure.

Lennar has investments in 116 such entities, down from 214 on November 30, 2007 but still far more than any of its rivals, said Morningstar analyst Eric Landry.

Landry deemed Minkow's report "flimsy," and said it did not cause him to worry that he had missed signs of outright fraud on Lennar's part; but he does think Lennar has used the joint venture structure too much for its own good.

"Investors will tolerate the opaque nature of the joint venture structure when land prices are going up," Landry said. "But when land prices are going down, the company loses the benefit of the doubt."

In its Monday statement, Lennar also disclosed information about its joint ventures in advance of the publication of its annual report and said it would be working to provide more information to analysts and investors in the coming weeks.

J.P. Morgan analyst Michael Rehaut noted approvingly that Lennar has reduced its exposure to joint ventures and in particular has cut its recourse debt, in which lenders can hold Lennar responsible for failure to repay, to $520 million from $1.03 billion at the end of 2007.

Rehaut rates Lennar's shares "relative overweight" and sees the builder outperforming its peers in the next year.

Like most U.S. homebuilders -- which are two years into a sharp downturn -- Lennar's shares are well off their 2005 highs. Over the past 12 months, they have lost 34 percent of their value, a steeper decline than the Dow Jones U.S. home construction index's <.DJUSHB> 10.6 percent decline.

(Reporting by Scott Malone and Helen Chernikoff, editing by Dave Zimmerman and Gerald E. McCormick)

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on LENNAR CORPORATION
12/02 LENNAR CORPORATION (NYSE : LEN) Files An 8-K Departure of Directors or Certain O..
12/02 LENNAR CORP /NEW/ : Change in Directors or Principal Officers (form 8-K)
11/24 LENNAR : Boca Raton selects three developers as finalists for city golf course s..
11/23 LENNAR : Three finalists emerge to buy and build on Boca Raton golf course
11/23 LENNAR : Boca aims to buy Ocean Breeze golf course, sell western course
11/22 ATTENTION INVESTORS WHO HOLD SHARES : WCIC) Should Contact the Shareholders Fou..
11/19 LENNAR : UHealth dedicates Lennar Foundation Medical Center in Coral Gables
11/18 CLARKSBURG SQUARE : High-Tech Community Selling Now
11/17 CLARKSBURG SQUARE : High-Tech Community Selling Now
11/03 LENNAR : Poinsettia's 'missing link' project shrinks by 10 acres, 17 homes
More news
Sector news : Residential Builders - Single Homes
11/17 FTSE rises, though Royal Mail lags after results
11/14 TAYLOR WIMPEY : UK builder Taylor Wimpey sees 2016 cancellations marginally rise
11/08DJD R HORTON : Shares Slide as New Orders Disappoint
11/07 U.S. executives comment on the presidential election
11/04 SAVILLS : Brexit will stop UK house price growth in 2017 - Savills
More sector news : Residential Builders - Single Homes
News from SeekingAlpha
12/05 TOLL BROTHERS EARNINGS : Mixed Bag For Housing
11/30 Homebuilders lag as rates climb, mortgage apps tumble
11/28 Don't Invest In Cuba - Bezek's Daily Briefing
11/25 Markets Think 'MAGA' - When Buying Builders, Focus On Toll Brothers
11/22 3 Reasons To Look At KB Homes
Advertisement
Financials ($)
Sales 2016 10 850 M
EBIT 2016 1 478 M
Net income 2016 896 M
Debt 2016 3 892 M
Yield 2016 0,38%
P/E ratio 2016 10,92
P/E ratio 2017 10,33
EV / Sales 2016 1,17x
EV / Sales 2017 1,04x
Capitalization 8 843 M
More Financials
Chart LENNAR CORPORATION
Duration : Period :
Lennar Corporation Technical Analysis Chart | LEN | US5260571048 | 4-Traders
Full-screen chart
Technical analysis trends LENNAR CORPORATION
Short TermMid-TermLong Term
TrendsBullishBearishNeutral
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 16
Average target price 51,0 $
Spread / Average Target 20%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Stuart A. Miller Chief Executive Officer & Director
Richard Beckwitt President
Jonathan M. Jaffe Chief Operating Officer & Vice President
Bruce E. Gross Chief Financial Officer & Vice President
Laura Lete Chief Information Officer
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
LENNAR CORPORATION-13.27%8 843
NVR, INC.-3.54%6 007
CALATLANTIC GROUP INC-15.45%3 791
SUMITOMO FORESTRY CO.,..-5.81%2 395
TRI POINTE GROUP INC-9.63%1 876
MERITAGE HOMES CORP3.27%1 435
More Results