Monday, October 30, 2006

Kara Financing Falls Through

Posted by the Asbury Park Press on 10/30/06


TRENTON — A bankruptcy court judge today gave permission to Kara Homes to move forward with the sale and closing of nine homes.

Kara had hoped to get permission to restart construction of up to 300 homes, but a lawyer for the troubled home builder said the short-term financing to get the company started again had fallen through.

Full Story...

We have a running commentary going in the comments section with lots of important insight about Chapter 11 bankruptcies provided by SCProfessor. I've bumped this recent post by SCProf from the comments section to the main board because it is pretty interesting and deserves to be read.

"As I'll discuss, the salient points of this article are contained at the end (I've quoted it below). What you are seeing is a common sense approach by the attorney for the unsecured creditors committee. He is smart enough to know that if unsecured creditors are to get anything, time is an adverse factor and you need to sell, sell, and sell before secured creditor claims exceed the value of the collateral (something they likely do with regard to many of the estate assets). Always smart to fight over money than depreciating assets (and with the real estate bubble, KARA's real property holdings clearly fit within the definition of "depreciating").

The idea of a CRO (chief reconstruction officer) is one that I expect Zudi to oppose. As to whether or not he is successful is largely dependent upon whether the "white knight" lender rides off into the sunset. My guess is financing is a dead issue because there were simply no unencumbered assets with which to secure repayment of the new loan. Obviously, given the condition of this debtor with no real assets other than some sort of an ownership interest in affiliates, it certainly wouldn't make sense in the exercise of prudent lending practices to base repayment chances simply on a loan's status as a chapter 11 administrative claim. Clearly once the case is converted, well Chapter 7 administrative claims and secured claims are going to likely gobble up all the assets. Remember all those lenders have promissory notes that contain attorney fee provisions and you can be sure the costs associated with those "more than two dozen lawyers" are going to have to be figured into any sort of solution.

I'm guessing we are only a couple weeks away from a complete meltdown, with construction lenders, mechanics lien claimants, and others piling on with motions for relief from the automatic stay so they can complete their foreclosures. Interesting times, that's for certain.

Take care,


A lawyer for the committee of unsecured creditors said he supported the sale of the homes.

"I hope this becomes the platform -- reduce real estate and homes to cash -- and we can debate who gets it later,'' said lawyer Michael D. Sirota of Hackensack..

More than two dozen lawyers representing banks, subcontractors and insurance companies, packed Kaplan's court room for the hearing. Among the other topics they discussed was the appointment of a chief reconstruction officer who would run the daily operations of the company.

4:11 PM"


Anonymous rbyzell said...

i really do hope that this is just another nail in the coffin for the housing boom in nj. i know that some people will get hurt but hey, it had to end sometime and because of lack of planning and greed, the region is very overbuilt. let the soul of the jersey shore return! i can't wait to hear the sounds of the shore again, without the sounds of construction crews!

Monday, October 30, 2006 9:54:00 PM  
Anonymous Anonymous said...

Zudi can you hear the fat lady singing yet?????

Tuesday, October 31, 2006 8:50:00 AM  
Anonymous SCProfessor said...

If you have read any of my previous posts, I'm sure you have sensed a feeling that I am most sympathetic to the plight of the homebuyers who made an unfortunate mistake in not escrowing their deposit with a neutral stakeholder (escrow). Instead earnest money deposits seem to have ended up in the hands of KARA, likely diverted to paying operational expenses. There may be an opportunity to develop a dialog on this blog that could be helpful to them in their efforts to recover at least a portion of their deposit. The focal point of this discussion centers upon information provided in another thread on this blog where someone indicated that Rose (aka Zudi's mom) was a responsible managing broker, earning commissions on transactions involving the sales of Kara homes.

I admit to knowing nothing about New Jersey law, but I suspect that it follows the approach of most progressive state jurisdictions, imposing fiduciary responsibilities on licensed real estate brokers. Assuming that to be the case, I submit that as the responsible managing broker, Rose had a fiduciary responsibility to the home buyers to ensure that their earnest money deposit was safe until the closing of the transaction when it could properly be disbursed to KARA. Rose knew, or should have known, structuring the contract where it allowed pre-closing disbursement of the buyer's earnest money deposit put the buyer in the position of potentially facing a catastrophic financial loss. Such action may well constitute a breach of her professional fiduciary responsibility. Hence, what I'd characterize as a potential source of recovery for these disappointed buyers.

What I think would help these buyers is specific information about how things at KARA were structured. Based upon the information provided, buyers may be able to make a better determination as to whether to pursue Rose as a source of recovery. What I want to make absolutely clear is I’m not indicating one way or another if Rose did something wrong. What I’m saying is these buyers need help in obtaining information so they can make an informed decision about the variety of legal avenues they may pursue, be they through civil court proceedings or perhaps through some sort of licensure administrative process.

Take care,


Tuesday, October 31, 2006 10:10:00 AM  
Anonymous SCProfessor said...

A good article on yesterday's KARA Bankruptcy Court hearing appears in the link provided below. I've quoted the article. It looks as though Zudi's world is crashing as I write this.

Additional cash woes for Kara Homes
$5M loan collapses, creditors call for CRO
Tuesday, October 31, 2006
Newhouse News Service
Kara Homes' financial problems have gotten worse.

A $5 million, high-interest loan that would have kept the company going for a month during Chapter 11 bankruptcy proceedings fell apart late last week. And now, creditors and lenders are demanding Kara founder Zuhdi Karagjozi relinquish control of his company and turn the day-to-day operations over to a chief restructuring officer.

Word of both developments came at a hearing in Trenton yesterday during which U.S. Bank ruptcy Judge Michael Kaplan was scheduled to rule on the $5 million debtor-in-possession loan from Medical Capital Group. In a courtroom packed with more than two dozen lawyers representing lenders, contractors and vendors, Kara lawyer David Bruck informed the judge Medical Capital pulled out on Friday.

Debtor-in-possession financing is money borrowed by a company during restructuring. Without it, Kara can't operate. Homes remain unfinished and closings can't occur.

Kara spent the weekend scram bling to line up new financing. Al though 70 essential employees re main, they are owed three weeks of pay, and the company has exhausted all funds to pay them, Bruck said.

In talks with lenders in recent days, Amboy Bank, which is owed $58.2 million, put forth the proposal to hire a chief restructuring officer. Although one possible candidate named in court was Roger Mum ford, a prominent New Jersey developer, Bruck said later in the day that he had dropped out. Lawyers for lenders and creditors said they wanted to interview several candi dates for the job.

Those interviews are expected to take place today. And the company hopes once a chief restructuring officer is hired, banks will be more willing to lend money to Kara during the bankruptcy proceed ings.

Judge Kaplan said he would leave his schedule open this week so the company can get quick approval if creditors agree on a chief restructuring officer and if Kara is able to reach a deal with another lender for interim financing. Kaplan would have to approve both measures.

In the meantime, Kaplan gave Kara permission to close on nine homes that are completely finished. The homes are scattered across the state.

The hiring of a chief restructuring officer reflects Kara Homes' dire situation. The company, one of the largest privately held home builders in the state, couldn't close sales fast enough during the hous ing boom. But it failed to put on the breaks as the market turned down.

The bankruptcy filing should have given the company room to breath while it restructured. But that process has stalled. While it is typical for debtors to line up debtor-in-possession financing be fore or soon after a company files for Chapter 11 bankruptcy protection, Kara has gone nearly a month without it.

"We find this case very, very much under stress," said Michael Sirota, a lawyer representing a committee of unsecured creditors. "In order to restore confidence in the lender community and customers at large, we think that a chief restructuring officer with expertise in this area will give the debtor a fresh start."

Seated quietly in the courtroom in a gray suit, Karagjozi said after the hearing he would cooperate with the chief restructuring officer. He had resisted past efforts by banks to relinquish the day-to-day control of his company, even as Kara had to file for bankruptcy protection and later had trouble finding a lender willing to give it debtor-in-possession financing.

Karagjozi said Medical Capital initially agreed to the $5 million loan, which was later reduced to $2.5 million, as a favor to him be cause he knew one of its principals. But he said the deal fell apart when Kara's banks refused to give Medical Capital the collateral it wanted.

One Kara lender, North Fork Bank, already has sued Karagjozi personally for the $33.3 million the company owes it. Karagjozi gave a personal guarantee on all $248 million construction loans the company received from banks. Other lenders could follow North Fork's lead.

"I think it's unfortunate that North Fork felt they had to do that," Bruck, the Kara lawyer, said.

Bruck said Karagjozi had no plans to file for Chapter 11 bank ruptcy protection personally.

"He'll defend it," he said of the North Fork suit.

Tuesday, October 31, 2006 10:23:00 AM  
Anonymous Anonymous said...

SCProfessor, with all due respect as I have come to look forward to your perspective on Kara events, I believe you are off base on this one. It is the responsibility of the purchaser's legal counsel to review and advise on any risks under the terms of a sales agreement before the terms are accepted. All purchasers with legal representation should have been well advised of the terms of the contract and therefore aware of the risk of monetary loss in a case such as Kara's.

Tuesday, October 31, 2006 11:17:00 AM  
Anonymous SCProfessor said...

You make an assumption that I'm not willing to concede. That is, purchasers sat at the table at the time of contracting with competent legal counsel at their side. Personally, seeing what has transpired, my assumption is that simply isn't the case. I suspect that in most of these instances the facts will provide insight into situations where their "counsel" may have been related to KARA. Hey I'm always one who believes that the more deep pockets you can bring to the table the better. Assuming you are correct and they were represented at the table by legal counsel, then I guess the question becomes has their attorney failed to meet a measure of competency by failing to advise them of the risks associated with disbursing to the seller prior to closing?

Tuesday, October 31, 2006 11:56:00 AM  
Anonymous Anonymous said...

In New Jersey, real estate contracts are generally signed by purchasers without legal counsel "at their side." Immediately following the signing, however, an attorney review period begins - usually three to seven days depending on the terms of the contract. During this time, the purchaser(s) should be receiving legal advice as to their rights and risks under the terms of the contract. During attorney review the attorney, more often than not, will attempt to make changes to the contract that he feels would best protect the rights of his client. It is not unusual for this review process to go on for weeks before the contract is accepted by the purchaser.

Even if your assumption were true, and the purchaser's attorney was in some way "related" to Kara, it would still be the attorney's obligation to represent his client, the purchaser, to the best of his ability. I believe that any action to the contrary could be construed as malpractice.

Tuesday, October 31, 2006 1:21:00 PM  
Anonymous Anonymous said...

Part Two of this sad saga is just about over now. (Part One was the rise, pt.2 the fall.) Kara is basically day-to-day right now. Zudi is finally being pushed aside whether he likes it or not & when he falls, so will his remaining disciples. The rest of the staff is waiting to see whether their next check comes from Kara or from unemployment.

Part Three will unfold in courtrooms and law offices over the next several years and it will be ugly, messy and bloody. There is an entire huge level of this story that hasn't fully come to light yet but it will eventually. The details will even boggle the minds of those who thought they knew what was going on. Me included, because even after a month I am still hearing things that make my jaw drop in amazement.

Tuesday, October 31, 2006 4:49:00 PM  
Anonymous Anonymous said...

Rumors say something will happen on Wednesday afternoon. Maybe they found some funding, maybe Zudi's out, maybe none of the above but something will happen. More later...

Tuesday, October 31, 2006 6:16:00 PM  
Anonymous Anonymous said...

"Karagjozi, 46, of Rumson, said he didn't think he paid too much for land, since the company's assets exceeded its liabilities when it filed for bankruptcy. Kara said it had $350 million in assets and $227 million in liabilities.

Instead, he said, increasingly strict building codes during the past two years prevented the company from keeping pace with its schedule.

"The cycle times to build homes were slowed down; it took twice as long to build a home as it used to take," Karagjozi said. "And we were working on getting those deliveries. We cut our overhead throughout the year."

Building codes LOL! Yeah, that was it. Holy cow, talk about delusional.

Tuesday, October 31, 2006 6:27:00 PM  
Anonymous Anonymous said...

maybe weds zudi will file for personal bankruptcy, the entire Peshkopia clan will slither back to Michigan and take Robbie with them.....

Tuesday, October 31, 2006 6:34:00 PM  
Anonymous Anonymous said...

yeah zudi it was the building codes, it couldn't have been your unrealistic year end closing numbers, or the incompetant nin com poops you had advising you, or an area pres who couldnt manage a single site much less a whole area...yes it definitely was the "building codes"

Tuesday, October 31, 2006 6:37:00 PM  
Anonymous Anonymous said...

Stringent building codes had nothing to do with the demise of Kara Homes. The fact that THE SUBCONTRACTORS WERE NOT GETTING PAID had everything to do with Kara's demise! Zuhdi and his inner circle of buffoons are clearly to blame.

Tuesday, October 31, 2006 6:44:00 PM  
Anonymous Anonymous said...

It was the building codes. After all, the towns wanted things right. Ask Zudi about the waterfront job he bought. One he thought he could put basements on and then realized he would have to redesign his product because waterfront means high water table! That was not "code influenced". Ask him about the sub who couldn't read plans and put foundations in backwards. Strict building codes got him again. How about the property that couldn't test clean for pesticides? There's that damn building code getting in the way again. Ask Zudi why he had an Architecture dept. that didn't turn out plans in a timely manner. Ask Zudi how well his "expediters" did with the JCP&L strike. They only managed to piss off every person Kara needed on their side. How about the properties where Kara forgot to put in minor improvements such as streets and cul-de-sacs? It took twice as long to build a Kara home because the towns were tired of fooling with Kara Homes. This downturn wasn't the demise for Kara. Zudi killed Kara by not listening to the people he hired to move him to the next level. He "Karacized" you so that all original thought was lost. His kool aid was brain poison!!!!!

Tuesday, October 31, 2006 7:01:00 PM  
Anonymous Anonymous said...

If any of you really want to help the so called poor souls who signed contracts with Kara, then start giving better info. Who can we call for advise? Do you actually know a decent real estate lawyer? Do we even need one at this point? Do you have any free advise? Otherwise, all you are doing is wasting time on your computers, creating drama, scaring people thinking they are responlible for buying a home for their families and wasting their life saving. Stop using this site for letting off steam. Go see a doctor or something. If any of you have the answers to the Kara situation, then why don't you get a list of the people who need help and start reaching out to help the homeless ones who are trying so hard to come up with the right answers. These debates you post only hurt innocent Kara victoms. Please change your arrogance. Don't be so self absorbed. Help the people who really need it. If your bitter because of the Kara saga just use it to help the victoms.


Tuesday, October 31, 2006 7:25:00 PM  
Anonymous Anonymous said...

What is supposed to be announced on Wed afternoon?

Tuesday, October 31, 2006 7:40:00 PM  
Anonymous Anonymous said...

There is a all hands meeting Wed at 330 with employees to discuss the future of Kara.

Stay tuned!!!!

Tuesday, October 31, 2006 8:09:00 PM  
Anonymous Anonymous said...

I think the 330 meeting will be Zudi asking employees for money!!!!

Oh, if you have a contract with Kara and have not seen a laywer yet you need to see a shrink.

Tuesday, October 31, 2006 8:11:00 PM  
Anonymous SCProfessor said...

In response to the Anonymous poster above who was concerned about us not addressing potential solutions, I have suggested those who entrusted their deposits with KARA are in an extremely difficult position with a need to look for recovery "outside the box." I honestly expect this case won't find much of a distribution to unsecured creditors. Now I guess buyers could argue that they have some sort of equitable lien on the property they were purchasing, but in the world of bankruptcy law, the general proposition is if you do not have a perfected lien you are out of luck. Even if a bankruptcy court were to recognize this "equitable lien," well it would be junior to secured liens (mortgages and perfected mechanics lien claims).

"Out of the box" recovery possibilities include those I alluded to in my earlier postings, real estate agents, lawyers, title companies, escrow companies, etc.

Good luck. That starts with finding a lawyer well versed in dealing with this style of mess. Lots of good people are going to get hurt. So sad.......

Tuesday, October 31, 2006 9:46:00 PM  
Anonymous Anonymous said...

You know what's so sad, you are the comfortables one in your homes not really caring about the buyer, probalbly because you are ones who think you will be paid first. Maybe you post this junk to discourage, the "unsecured creditors" so they give up fighting. Don't be so sure of yourselves. The lawyers, contractors, agent, etc. should be paid last. The purchases of the homes generate your paychecks. What a scam.

Tuesday, October 31, 2006 11:24:00 PM  
Anonymous Anonymous said...

What a dopey comment. Everyone on the creditor side seems to basically want the same thing-to see Kara's assets liquidated sooner rather than later so those assets are not gobbled up in the process of a lengthy and pointless reorganization that doesn't appear to be going anywhere. The court decides who gets what and when they get it and I doubt those decisions will be based upon posts on this blog. People are just discussing the case from their point of view, if you want to present the perspective of a homeowner, do it and quit whining about everyone else's comments.

Wednesday, November 01, 2006 12:24:00 AM  
Anonymous Anonymous said...

SCProfessor, how do you come up with an escrow company or a title company being a target for an unsecured creditor's suit? The homes obviously have not closed. Lawyers suing lawyers??? I don't see that being an easy avenue for recovery. Unless, are you a lawyer willing to sue another lawyer?? Those are tough to find, you could make a bundle if you could prove your case. The broker of record, maybe. I guess you would need to be able to prove that he/she had inside financial information and there was a scheme of sorts to defraud people of their money. Agents, especially outside agents, aren't paid unless a home closes. They couldn't have possibly been privy to Kara's inside financial information or they would have known they may never be paid. Why then would they even bring a client to Kara? Why would someone continue to work for a company if they knew they may never get paid? I would submit that they wouldn't, and therefore couldn't have known it would come to this.

The anonymous buyer seems to be the type that may take comfort in the fact that without a job, and a paycheck, many former employees may soon be in their same situation. If you don't pay your mortgage, you will eventually lose your home. Hope this makes you feel better.

Wednesday, November 01, 2006 9:38:00 AM  
Anonymous Anonymous said...

Despite your poor grammar and terrible spelling, if you have not contacted a lawyer or taken steps toward recovering your money already you seriously need your brain checked. The postings on this blog, I think, have given you a pretty good indication of the state of Kara Homes pretty early on in the game. Also, I'm sorry that my heart does not bleed for you but I would recommend you don't chastise or berate people from whom you are asking free "advise".

Wednesday, November 01, 2006 10:27:00 AM  
Anonymous Anonymous said...

If you can't spell, don't comment on others spelling...advice is not spelled "advise."

Wednesday, November 01, 2006 11:13:00 AM  
Anonymous Anonymous said...

No shit idiot. Thats a quoted misspelling from the previous posting I was commenting on.......

Wednesday, November 01, 2006 11:50:00 AM  
Anonymous Anonymous said...

I interpret your outburst as indicative of the level of customer service you offered when you worked for Kara. Better dust off that resume big guy.

Wednesday, November 01, 2006 2:03:00 PM  
Anonymous Anonymous said...

I never worked at Kara, just a patron of the blog. I just call out an idiot when I see one. If you went into a contract with Kara Homes within the past year without a lawyer present or attorney review I believe thats indicative of your general mental capacity. It's standard practice for homebuilders to offer the homebuyer the option to purchase a deposit bond in order to protect your deposit monies. I know Kara, for a fact, offers that option as well. I've seen their contract template and that option IS in there. Perhaps if you read your contract before signing it or had a proper attorney review it you would have realized that. Any attorney in NJ worth his/her salt knew about Kara's failing reputation and would have recommended you purchase the bond. The conclusion made here is that you either weren't bright enough to read the fine print in your contract or you were too cheap to protect yourself. Either way you have gotten what you deserve.

Wednesday, November 01, 2006 3:13:00 PM  
Anonymous Anonymous said...

To the unfortunate homeowner above: you are bemoaning the fact that posts on this blog are not addressing your issues, yet no one knows exactly what your issue is. This blog is quite receptive to discussions of all things related to real estate and if you posted the details of your current situation I would expect you'd begin a discussion that might touch more on what you are looking for. Trying to establish some kind of scale of degree of victimization will not win you may sympathizers here or anywhere else.

Wednesday, November 01, 2006 4:20:00 PM  
Anonymous Anonymous said...

I wish you two would knock it off.
Does anyone know what the Wednesday meeting at Kara was about?

Wednesday, November 01, 2006 4:42:00 PM  
Anonymous Anonymous said...

I joost want to move into my house or get my money back. I think everybody at Kara Homes cn go to hell.

Wednesday, November 01, 2006 5:56:00 PM  
Anonymous Anonymous said...

You are obviously one of those loser lawyers to make stupid childish comments. You are the mental one to communicate to people that way. You have know Idea about any of the Kara issue, get a life loser.

Wednesday, November 01, 2006 5:57:00 PM  
Anonymous Anonymous said...

You are loser homebuyer. There is know way you are moving into your house. Joost get over it and move on.

Also, learn to speak English.

Wednesday, November 01, 2006 6:00:00 PM  
Anonymous Anonymous said...

So what happened at the meeting this afternoon????

Wednesday, November 01, 2006 6:11:00 PM  
Anonymous Anonymous said...

Yea, thats what I'm checking in on. Someone said there was going to be a 3:30 meeting today. I'd bet the lack of comment on it yet is not a good sign. Maybe everyone is getting drunk at the hotel bar........

Wednesday, November 01, 2006 6:15:00 PM  
Anonymous Anonymous said...

who's paying for the drinks.....not zudi that's for sure

Wednesday, November 01, 2006 6:26:00 PM  
Anonymous Anonymous said...

OK you all want to know what happend at the meeting. NOTHING. Ok-that's it no more. Those that are still there are getting paid on Friday. Those that are gone still aren't getting paid. No work is getting done. No homes are being built. They are trying to work it out-CRO-DIP and any other abreviation you can come up with including FUBAR. The bottom line is no one and I mean none of the "blogger experts", none of the current employees, none of the current homeowners, none of the sub-contractors, none of the banks and none of the inner circle knows what exactly is going to happen tommorow, next month or next year. The entire process is in a constant state of flux. The never ending rumor and speculaction fiasco that this has become is sad. I understand that this boards anointed expert SC prof is quite opinionated on something he knows nothing about-I find it comical if not sad to beleive that anyone upts any credence in the opions of a person who gets all of his information on a subject from an internet blog.
The reality of the situation is no one really knows where the Kara saga is heading and any opions are just that opinions.

Wednesday, November 01, 2006 8:41:00 PM  
Anonymous Anonymous said...

The meeting was supposedly going to address the immediate future of the company. The big guy was running late, as usual, and if the meeting went down at all it was very late in the afternoon. Mustn't have been too important, then.

Wednesday, November 01, 2006 8:50:00 PM  
Anonymous Anonymous said...

No one here has declare themselves as being an expert about anything. Those with an interest in the case are simply following the developments as they happen, then they offer comments on them. That's it. It's a semi-free country and people are allowed to speculate about whatever they wish. if you don't like it, don't read it and if it angers you, TS.

Wednesday, November 01, 2006 8:56:00 PM  
Blogger Little Silvered said...

I declare scprofessor an "expert" on Chapter 11 bankruptcies, workouts and reorgs. The Chapter 11 process can be quite complex, and while he may not have access to discusions between Kara and its creditors, he has given us important insight into the actual bankruptcy process.

Wednesday, November 01, 2006 9:06:00 PM  
Anonymous Anonymous said...

Actually it is one your so "blogspert" sc at one time says he really knows nothing about the details on the case and at another point says "The idea of a CRO is one that is one that expect Zudi to oppose". Why would the impartial chapter 11 expert have this type of opinion. Or thats right it's a free speach blog where any one can make himself or another an expert on any subject, spout what ever rehtoric they want and get away with it unscathed. The only problem is some take what they read on this faceless, nameless anonymous bog as gospel. They think what the good prof says is the be all end all on the matter. Remember folks because it is a free country you can get away with anything on the internet. Take all you read with a grain of salt and come to your own conclusions.
PS. Who the heck is ignorant enough to come to a blog for their legal advice.

Wednesday, November 01, 2006 9:43:00 PM  
Anonymous SCProfessor said...

Anon said:
" I understand that this boards anointed expert SC prof is quite opinionated on something he knows nothing about-I find it comical if not sad to beleive (sic) that anyone upts (sic) any credence in the opions (sic) of a person who gets all of his information on a subject from an internet blog."

My response follows:

You are quite correct that I do not have a crystal ball with which to forecast the future relating to KARA. All I can do is to provide an opinion which is based upon past experiences and includes an understanding of the Bankruptcy Code and how Chapter 11 reorganizations operate. Given that past experience, I'll summarize below what I think will happen. How about a month from now (December 1st) we look back and see how close I come to forecasting what has happened.

During the next 30-days, with or without Zudi's agreement, creditors will move for the appointment of a chief restructuring officer. Their efforts will be supported by construction lenders willing to "fund" the completion of the homes and ultimate sale. Of course there will be strings attached. Any funds loaned will be paid back from sales proceeds. Look at it from the perspective of a construction lender. Better to advance funds to complete the project and get the advance along with the construction loan paid off than resort to foreclosure and face the time it takes to complete foreclosure and then sell the uncompleted structure "as is" or go ahead and complete it. Knowledgeable construction lenders will view this as simply a salvage effort (cutting your losses).

An interesting and I suspect unhappy situation exists for those buyers who have deposits on a specific home and are ready to close. The buyer of course will want credit for their deposit (previously paid to KARA). My understanding of bankruptcy law leads me to a conclusion that the buyer should not be entitled to this credit as it gives them more than they would get as an unsecured creditor through a plan of reorganization.

A benefit may exist for those "buyers" who have made deposits for the purchase of a home and now, with real estate prices falling, their agreed contract purchase price exceeds the current value of the completed home. For them, even with the loss of their deposit, they may actually be in better economic shape. Let me explain by way of example:

Say you entered into a contract with KARA to buy a home for $1,000,000 and gave them a 5% deposit ($50K). Market values as the result of the bubble have been reduced by 10% since the contract date. As a result the property is now only worth $900K. Guess what? Even if you loose your entire deposit you are still $50K ahead.

All in all, this is certainly an interesting situation and one I'm glad to have no relationship with.


Wednesday, November 01, 2006 10:18:00 PM  
Blogger Little Silvered said...

Anon 9:43.

Your sentences are fragmented, hard to read and generally incohorent. SC's facts and opinions are helpful for those with a vested interest in the outcome of the Kara bankruptcy and interesting for those that have no claims, such as myself. While SC obviously can't tell the future and does not have all of the facts, his knowledge of the bankruptcy process provides readers here with possible directions the case may take. You, on the other hand, ramble and spell many words incorrectly.

Wednesday, November 01, 2006 10:19:00 PM  
Anonymous Anonymous said...

"Ask Zudi why he had an Architecture dept. that didn't turn out plans in a timely manner..." That'a a good question. Right Joe buddy? You were going to manage the plans and any issues with the trades, vendors and Gov't agencies. No problem, ya right?! The work was supposed to flow in a timely manner but you were too busy looking important in your little office or checking out Suzanne's new cans. Care to comment? Having Simpad do your work on Hovnanian's proprietary Argos software didn't pay off like you thought either, did it? I wonder if KHOV's going to pin your ears back on this one? So Kara owes you and Simpad some cash. Get in line. Chump change for a guy as important as you. You got what you deserve. Such a waste of oxygen (and a degree).

Wednesday, November 01, 2006 10:47:00 PM  
Anonymous Anonymous said...

I'm already in my house. I think it's quite funny how unintelligent you are. Mr. Professional.

Wednesday, November 01, 2006 11:22:00 PM  
Anonymous Anonymous said...

"Tell me,what's going on with the clubhouse?"

Wednesday, November 01, 2006 11:35:00 PM  
Blogger Anonymous said...

So, as expected, it would appear nothing came out of today's meeting. There's a big surprise.....

Thursday, November 02, 2006 12:20:00 AM  
Anonymous Anonymous said...

By the way.... Lay off Suzanne, she was nothing but nice to everyone and helpful to all. It's not her fault her douche bag boss wouldn't take any calls. She tried her best to mitigate Zudi's damage. Remember she's just Zudi's secretary, not an easy task for an ass like him.

Thursday, November 02, 2006 12:23:00 AM  
Anonymous that dude said...

Yeah, right on. Personal attacks and insults add nothing to any discussion. It's unnecessary and has nothing to do with the big picture. Please don't drag innocent names through the dirt out of anger and spite.

Re: meeting, if you ever worked there, you have to laugh upon hearing the word. No company on earth ever had more wacky, disorganized meetings than Kara & Zudi was late for every single one LOL.

By the way, I have found Scprof's posts to be informative and even handed. He's certainly not offering some wild, biased speculation, only opinions based on facts in published articles about the case. It's been interesting to read the input of someone familiar with bankruptcy law & I don't remember any posts suggesting his word should be accepted as gospel. Plus, he can spell and/or operate a spell checker, either one of which is helpful.

Thursday, November 02, 2006 12:59:00 AM  
Anonymous Anonymous said...

One of the previous blogs mentioned Zudi's Rumson house and surmising that taxes were never paid for the free labor and materials. Does anyone have more info about this? Whether this has come up anywhere else? What are the implecations if this is true? I have also heard that the same people were some of the ones who were hurt the most losing huge amounts of money in Kara's bankruptcy. Can this be verified by anybody?

Thursday, November 02, 2006 1:35:00 AM  
Anonymous scprofessor said...

Anon 1:35:

Your question about whether the labor and materials supplied to Zudi for the improvement of his residence would be income for tax purposes is a fair one. I doubt that it would be characterized as "a gift." If it isn't a "gift," then I suspect the IRS would regard it as income for tax purposes.

On thing that I've noticed with many of these Chapter 11 proceedings that are planned at the last minute when the bank accounts are empty is the failure of management to timely pay employee withholding taxes.

Good news for you current and former employees is that you are generally viewed by taxing authorities (IRS and your State) as innocent and therefore given credit for the withholdings that were removed from your gross pay.

Bad news for those in management who made the decision not to turn over the withheld funds is the taxing authorities equate such action as something akin to embezzlement and look to the managers as a source of recapture. If this turns out to be the case, well I wouldn't want to be in the shoes of KARA's senior management. They shouldn't expect much benefit from the "Zudi made me do it" defense.

I want to thank those who have provided positive comments relating to my postings. Legal concepts relating to bankruptcy are sometimes difficult to understand. They are based on a premise that all creditors should be treated the same. Truth is they are not and for specific reasons. They fall into two general categories, secured and unsecured. There is an underlying goal to attempt to reduce secured claims to unsecured claims. If the secured creditor has not dotted every "i" and crossed every "t" relating to "perfecting" their security, the trustee (or debtor-in-possession) will file an appropriate motion so the Court will have an opportunity to determine if the secured creditor should be reclassified as an unsecured creditor.

As I've mentioned before, this case is complicated by the fact that Estate assets for the most part are alleged ownership interests in affiliated limited liability corporations. I suspect what will happen down the road is each of these related affiliates will be placed in their own bankruptcy and all of them consolidated for purposes of administration. However, unsecured claims in the base case (Kara Homes) may not necessarily be viewed as claims in the affiliated bankruptcy proceedings.

If this whole thing sounds like a convoluted mess, I think you have the picture. Good news is that bankruptcy courts have faced this sort of challenge before.

One final comment. In the news article I posted above (see 4th posting), KARA's attorney indicated that Zudi "had no plans to file for Chapter 11 bankruptcy protection personally." My sense is that given the monetary amounts of KARA's debts that he has appeared to personally guarantee, the filing of a personal bankruptcy petition (either voluntary or involuntary), is only a matter of time.

Thursday, November 02, 2006 2:48:00 AM  
Anonymous Anonymous said...

What about the fact that Z is being sued by North Fork bank for 23mil? I was under the impression that because of that, the company will be liquidized.

Also, in regards to the meeting yesterday...Basically, no one is coming to save Kara, no CRO, no Trustee..Z has some private lenders set up to fund Kara.

NO good! So all the people that help tank the company are staying in place.

Thursday, November 02, 2006 12:18:00 PM  
Anonymous Anonymous said...

K. Hov just laid off a group of people today. I don't know how many, but I just thought I would post it just-in-case there are any K. Hov people out there that can give us some more detail.

Thursday, November 02, 2006 3:15:00 PM  
Anonymous Anonymous said...

I heard yesterday that they were laying off 300 people today. A vendor of theirs told me that

Thursday, November 02, 2006 4:47:00 PM  
Anonymous Anonymous said...

Anybody taking bets on how much more time Zuhdi's got left? I say two-three weeks. I hope that all you true believers have your resumes updated.

Thursday, November 02, 2006 5:00:00 PM  
Anonymous Anonymous said...

K. Hov didn't lay-off anywhere near 300 people today. It was something more in the realm of 20-30, in New Jersey at least. From what i hear this is just the beginning. Maybe 300 is an accurate total number.......

Thursday, November 02, 2006 11:35:00 PM  
Anonymous Anonymous said...

Knowing most of the companies that did the work on Zudi's house very well (their names are some of the very high dollar claims in the BK doc), and being involved with the Rumson house myself in 2001, I can without reservation say that these businessmen were cajoled into doing freebee work on the promise that Zudi would "take care of them". To me that indicated at the time a personal guarantee that he would give them all the work they wanted if only they would take care of him first as an act of their good faith.

The problem with that was the way Kara conducted business even back in 2001. Zudi was driven to be the biggest builder in NJ (refer to the now infamous Builder magazine article on that). To grow that fast he needed all the cash he could get his hands on, which meant he had to do two things. Run the business at a deficit and get ever larger loans (land loans, frame start loans, etc), ignoring the advise of much more prudent staff. I am thinking most particularly of the ex-VP of accounting, which will remain nameless because he was a good honest man who was placed in a very difficult position by the Z-man. In an effort to grow the business as fast as possible, all billables were put off for as long as possible by Zudi and J.K., and at the very most paying only a small portion of each bill every month, thereby generating part of the cash to pay salaries / commissions / bonuses and generating enough cash to buy ever more land for future developments and so on :(.

Getting back to the point, the Rumson house was built by people who never got paid for the work or building materials for that job. (Isn't that a gift he should have paid taxes on?) They were indeed given more work as promised but were gut hooked by Zudi because in order to get some money out of Kara, they had to peform more work or risk being put at the bottom of the payables pile or having their bills inexplicably lost by accounting, thereby losing another month or two in their effort to collect all payments owed. (Hopefully this pyramid scheme / ponzi scheme pattern will eventually come out in court.)

It was clearly standard practice coming directly from the top to never pay any vendor or contractor completely or risk losing their leverage on them as well as money for their land bank. Unfortuately this didn't always work out as planned. I distinctly recall one episode in 2002 when two very agitated plumbers came into our office at 7:30AM demanding money or they were going to get even. They were promptly sent to the accounting office at the north tower on the upper floor to pick up their check. I understand they got their money. For a while this happened quite a bit and was the only way some contactors got paid, until a peep hole and an extra deadbolt lock were installed on the accounting department's entry door, shutting that option down too.

Kara did not 'run into problems just recently', nor was it 'the employees fault' as was claimed by Rose (one of many unskilled family members who were on the payrole). Kara's leadership set out from the very beginning on a deliberate course to use all the money they could get their hands on as a tool to becoming the biggest builder in NJ, take care of his family and friends and having that billion dollar net worth Zudi talked about so much at the staff non-meetings. Home purchasers, lenders, employees, trades and vendors as well as the business itself were all used in an attempt to glorify Zudi's huge ego, ultimately burning everybody in the process, very much like Enron's Lay and Skilling.

This message should be dedicated to all who lost something to Zudi, especially to those who put money down on a home and will never get their money back, but also to those who did so much work and were promised so much but were only partially or never paid, to those who submitted endless bills, finally writing them off as business losses, to those who filed bankruptcy because of Zudi both several years ago in an economy that was staggering in it profitablility and also again at this time due to Zudi's actions, and also to those who worked so hard to keep the business going and were let down endlessly and finally let go just prior to pay day.

We have all read the Kara Blogs with interest and for those who did not work there, they have gotten a fairly well fleshed out picture of the goings on at Kara Homes. But it's not a complete story. There is so much more dreck that needs to be brought out that the truth be fully known, mostly in order for healing to begin.

Friday, November 03, 2006 1:43:00 AM  
Anonymous Anonymous said...

What a great overview of the problems at Kara, you really nailed it.

Now Zudi is going to try to pull the wool over the eyes of the secured and nonsecured creditors by borrowing money from some real estate guy and prop him up as a paper CRO with tons of building experience.

This paper CRO is a buddy of JK's who from what I have heard is being investigated by the attny gen of NJ for his ilegal land deals he did for Zudi. I guess he will be kissing all of his homes goodbye. He can always move into the family car.

You know its bad at Kara when their CFO John Caserio leaves the company with no notice.


Friday, November 03, 2006 1:44:00 PM  
Anonymous Anonymous said...

Hey, I also heard that JK is being investigated by the Attrn Gen's department. I wonder if Zudi will be brought up on charges also.

Can you see JK in prison telling his outlandish stories!!!

Maybe that other moron GB can share a cell with him. That long caveman hairdue will get him alot of friends in prison.

The irony of it all will be Zudi will get away with a slap on the wrist and those other two idiots will be "takin it in the rear!!"

Friday, November 03, 2006 4:15:00 PM  
Anonymous disgruntled goat said...

Thanks to whoever posted that story re: Zudi's house. I've head a hundred variations of that story but not from that perspective. Zudi's house was not the only employee property that benefited from a little "extra" attention, either.

The "guarantee them future work in lieu of payment" policy was actually endorsed by the big guy at the company meeting in 05. The obvious flaws in this system were pointed out to him frequently through the years but those warnings never got through that massive ego of his. That policy also applied to his own people, as anyone owed bonus or commission money will tell you.

It's been a month now and Zudi is still scrambling and scraping the bottom of the barrel in order to borrow some money from anyone, anywhere. You can be certain that anything he or any of his representatives has said publicly is a lie. God only knows what he's really up to, because those piddling sums of cash he seeks to borrow won't be nearly enough to fix that mess. My guess is that his ass needs covering and quick.

Friday, November 03, 2006 5:37:00 PM  
Anonymous disgruntled goat said...

Judge asked to appoint trustee in Kara Homes bankruptcy case
This was just posted on a little while ago...

Posted by the Asbury Park Press on 11/3/06


TRENTON — The U.S. Trustee Office today asked a bankruptcy court judge to appoint a Chapter 11 trustee for Kara Homes Inc. or the company's "hope for reorganization will be lost.''

Citing the company's dire financial straits and its inability to raise any funds to
continue to operate, the U.S. Trustee's office said a trustee should take over day-to-day operations. That person could try to raise funds for Kara Homes to continue.

"The debtors do not have cash to operate,'' the U.S. Trustee's office said in court papers filed today. "Without an immediate infusion of money, the debtors' opportunity to reorganize will disappear along with the hope of creditors being made whole, and consumers being able to see their unfinished homes completed.''

The appointment of a trustee is the "only viable alternative.''

Kara Homes lawyer David L. Bruck said Kara will oppose the request for a trustee. "We think it's unfortunate and it's unnecessary,'' he said.

A hearing is scheduled for Nov. 13 before Judge Michael B. Kaplan.

Friday, November 03, 2006 5:40:00 PM  
Anonymous Anonymous said...

Did Robbie call John Casiero and chide him for not having given notice that he was leaving? Did she get his cell phone and keys?

Friday, November 03, 2006 6:22:00 PM  
Anonymous Anonymous said...

More importantly, did she even think to ask him why he was leaving? After all, Kara is going to make it back! Just ask Zudi. After he takes three hours to tell you about about another scheme to make a gazillion dollars, you to will be one of the faithful!

Friday, November 03, 2006 8:27:00 PM  
Anonymous SCProfessor said...

I find it interesting that Kara’s attorney chooses to use the word “unfortunate” so often in response to questions from the newspapers.

When responding to the action of one of the major banks in filing a civil action against Zudi he said: "I think it's unfortunate that North Fork felt they had to do that," Bruck, the Kara lawyer, said.

When asked about to the request by the U.S. Trustee’s Office for the appointment of a trustee, Kara Homes lawyer David L. Bruck said Kara will oppose the request for a trustee. "We think it's unfortunate and it's unnecessary,'' he said.

The hearing on this new motion isn’t scheduled until a week from Monday (November 13th). I’m thinking that you will see support for the motion from the Unsecured Creditors’ Committee and the major construction lenders who will show a willingness with a promise of money to support completing the unfinished homes.

The last name of Kara’s attorney seems somewhat fitting, reminding me of what is in store for Zudi and Mr. Bruck when they walk into the hearing on this motion.

Friday, November 03, 2006 11:28:00 PM  
Anonymous Anonymous said...

"Thanks to whoever posted that story re: Zudi's house." I appreciate the positive feeback on my opinion of this whole Zudi mess. Here is an additional point to consider. KH was created and maintained on a faulty foundation and eventually came crashing down as all without a firm foundation eventually do. Read on for confirmation.

On a gorgeous spring day in '01, an urgent message wa received from the Director of Safety that three concrete trucks scheduled to pour Zudi's foundation stem walls had already been sitting on the road in front of the property for 2 hours spinning there loads waiting for a concrete crew to show up. He and I got to the property a fast as we could, and in the meantime phone calls were quickly made to get some men out there. We learned that Zudi never appointed a field manager, so things were beginning to fall apart very quickly at the site. In this case concrete was ordered but a concrete crew was not. The bottom line is that by the time a crew arrived it was now over 3 hours since the concrete trucks arrived and they had added water to their loads several times to keep their mixes from setting. We discussed what to do, including rejecting the concrete. A call was made to the office for guidance and, astonishing as it seems, were ordered to allow the concrete pours to proceed. We discussed performing slump tests but already knew what to expect and also why bother we thought at this point. Later this issue was brought up to Z-man and requested that core samples be taken for testing, after all, it was his house. Again our concerns were minimized. So, we thought, if he wants to build on that foundation let him, and he did. A beautiful 7,500 square foot mansion on the lagoon with a gourmet kithen for the maid, a pool, guest rooms, etc. All the trades and vendors involved were ultimately stiffed by Zudi, never forget this point.

This is what went through my mind at that time. He would even risk his own family to get what he wants. It's all water under the bridge now but the family that moves into that house after Zudi vacates will have serious problems at some point as the concrete literally decays away to concrete powder beneath them. Zudi is learning the hard way that all stable, solid things start with a solid foundation. Best to you as you job hunt. R

Saturday, November 04, 2006 2:16:00 AM  
Anonymous Anonymous said...

Zudi is not stupid. HE has already lined up money and CRO and a new CFO from this investement company.

He has the unsecured creditors snowed to beleiive that he will give control to these two individuals. He has too much of an ego to let the company go.

THe smartest thing the courts could do is to appoint an independent trustee. They are the only ones to uncover that mess.

Does anyone know about those closings the judge ordered last week, have any closed???

Saturday, November 04, 2006 7:52:00 AM  
Anonymous Anonymous said...

None of them have closed yet. They still haven't finalized the paper work on the closings. The leins haven't been lifted on the individual properties as of yet.

Saturday, November 04, 2006 8:41:00 AM  
Anonymous Anonymous said...

Z Man's decision making days are about to come to an end. I doubt the court is going to allow him to install some figurehead overseers and allow him to seek out ever-more ridiculous loans. The court will appoint someone else to be in charge of the remnants & Zudi & the gang will trot off into the sunset. After someone impartial assesses that mess, they'll realize how hopeless it is & it'll be Chap. 7 for Kara Homes.

Saturday, November 04, 2006 12:53:00 PM  
Anonymous Anonymous said...

When Robbie and Hektor get canned please make sure they turn in their cell phones and keys. Is Robbie's ear piece company property?

Saturday, November 04, 2006 5:19:00 PM  
Anonymous Anonymous said...

I guess the bloggers that are rooting for Zudi's demise aren't owed a huge amount of money. As I understand it Chapter 11 will be much better for the creditors than
Chapter 7. Maybe the "professor" wants to enlighten everyone. I would rather see Zudi swim than sink.

Saturday, November 04, 2006 6:55:00 PM  
Anonymous SCProfessor said...

In my opinion irrespective of which Chapter (7 or 11), this case falls under, it is going down a liquidating path. As to whether a build out makes sense, well I'd suggest each project must be viewed separately to ascertain whether or not it is already over-encumbered with secured liens (construction loans and/or mechanics liens). In situations where it is over-encumbered, probably best to give it to the secured creditors and have them deal with its completion. In situations where there is equity it may make sense to complete the project or sell it as-is.

The real issue is whether this decision making process should involve existing Kara management. Seems like a lot of creditor distrust. That being the case, well I'm not sure if I put myself in the shoes of someone owed a lot of money, I'd trust Zudi to be making business decisions.

I can tell you that as poorly planned as this bankruptcy was (e.g., no post-petition financing in place), seems to me that creditors would certainly have a basis for having any sort of liquidating plan not operated by existing Kara management.

Saturday, November 04, 2006 9:47:00 PM  
Anonymous Anonymous said...

Besides Robbie's cell phone, make sure someone gets her Kara shirts back too!!

Sunday, November 05, 2006 7:48:00 PM  
Anonymous Anonymous said...

I put my Kara shirts in one of those donation boxes, so if you see a homeless person wearing one, don't automatically assume they have any ties to the company. But given the circumstances, they very well might.

My cell phone worked for weeks after I was fired, uh, I mean terminated. I did my best to attempt to reimburse myself via ringtones and peak minutes but I never came close. The chargers and the battery work with my own phone, though, so it's not a total loss.

Sunday, November 05, 2006 10:36:00 PM  
Anonymous Anonymous said...

The word is Greed!!That is what Happened to Zudi
He really did care about people and his empire. He had people that would do anything for him But when he hired his uncle and that robbie Shultz the company started to decline Zudi did not want to hear it Some of the people in the field had his ear and all they put into his head was Bullshit. He Hired people in postions that they did not belong. Zudi's Heart was to big he could and would not fire them because that would show a sign of waekness and that he mad a mistake EGO all the people that are still around are just waiting for the last peice of zudi to Die. I believe Zudi forget all the people that started with him and had the same dream he had if you would have taken inventory of the people who helped you get here they are all gone because they were truly loyal to you and you forgot about loyalilty

Monday, November 06, 2006 1:18:00 PM  
Anonymous Anonymous said...

How Many Kara homes Managers DIED because of Zudi's unrealistic
year end closings Do You think zudi went to there wakes or funerals NO NO he was out with women theating does his wife deserve this how about his 2 girls and his new son..

Monday, November 06, 2006 1:34:00 PM  
Anonymous Anonymous said...

Why did you not listen to some of the people that came thru for you ? How do you look at all the people you lied to workers that became friends of yours Some people broke bread with you and you called them friends I guess if you do not screw your friends who do you screw just think how many lifes you ruined Think about how many people will not have money for christmas because of your GREED EGO and the lies you believed because you kept telling them .How does one live with themselfs maybe you will write a book and some songs
after all where are all the people you used to hang out withthe inner circle
I can't believe people allowed you to do this we all new after patrick left it was only a matter of time I guess your best puppet got his own mind and Balls and could not lie for you anymore because he new the end was near and Left. also Tom Gough he came out of NOWHERE to Save the the day the only thing he saved was his contract You should have gotten rid of him along time ago he caused you many problems with dirt
but another one that was going to save the day what happened to all your ties to goverment freeholders etc your girl KL turned out to be full of shit,,she did nothing for you knew no one and did nothing or did she..How did your house get done in Rumson was it a Shake down or was it a demand or a threat do this and you will get more work People No what the truth is someone will sing for a price.alot
of people worked on that housefor free because if they did not they probrely would not have gotten the money from other jobs they where on You used to have a heart and now you are empty you thought because you paid people that worked for you you owned them and they were at your call turned out you have nothing But as you say you can rebuild not this time you willm have to hget a job but no one will hire you and if they do i hope you get treated like you treated some people like Shit what goes around comes around your turn to see how us real people feel.

Monday, November 06, 2006 4:32:00 PM  
Anonymous Anonymous said...

KL - Lodattto?

Monday, November 06, 2006 6:46:00 PM  
Anonymous Anonymous said...

Jesus man, it took me ten minutes to read that. Every hear of punctuation?

Monday, November 06, 2006 11:24:00 PM  
Anonymous Anonymous said...

after patrick left it was only a matter of time - I got news for you. The same problems were occuring at Kara in 2000. I mean the same Zudi and JK money problems, the same sorry land purchases, lack of payment issues, disgusting quality control at some jobsites (Serratelli) and everything else. What kept it going was the landbank scheme and endless loans and promises. Patrick had his problems but I respect him. We worked together at 2 places and I also knew his family. I wish him well.

Tuesday, November 07, 2006 12:50:00 AM  
Anonymous Anonymous said...

Maybe in his spare time Zudi will play Jail House Rock and claim he re-wrote it with Bon Jovi. No, can't do that. Already made one claim he strummed with him in a Staten Island news article and got in trouble for that. What about Eric Clapton? Nope, same thing. What about driving up and down the state until 3:00AM with a comatose Kelly talking about how he's going to make it big again? What's the guy going to do when he discovers he has no inner circle left to blame? You know, The cool thing about Kara Homes was that is was an open book. Nothing was hidden and that's why there are so many stories, all true.

Tuesday, November 07, 2006 1:11:00 AM  
Anonymous Anonymous said...

will have all the time in the world to think about re inventing himself. Maybe zudi will go by his real name Victor maybe not because he is not a victor but a Loser.what about all the money he spent on advertising and music and TV ads Kara cares about Kara Oh ya thats Zudi

Tuesday, November 07, 2006 7:22:00 PM  
Anonymous Anonymous said...

Remember the proposed office building/HQ?

Tuesday, November 07, 2006 7:35:00 PM  
Anonymous Anonymous said...

How about his LBI house? Let talk about All that. Same issue as the Rumson house exactly.

Wednesday, November 08, 2006 9:50:00 PM  
Anonymous Anonymous said...

The LBI house was sold for 1.3 million about two months ago.

Zudi put the home in his wifes name and she pocketed the 1.3 million. My guess it is in a Swiss Bank Account.

The office building was a collosal failure. I would attribute that to Joe Reis the old head of architecture. He blew that whole deal. Does anyone know what he is doing now???

Still I am surprised that no one is talking about John Caseiro being pushed out the door by Uncle Hektor!!!! John C is the one person who can bury Zudi, what is he doing now???

Get ready for another blood letting of some of the existing employees still at Kara. If anyone new comes in they are going to start cutting the fat again. I hope all existing employees have their resumes out

Wednesday, November 08, 2006 11:08:00 PM  
Anonymous Anonymous said...

The failure of the office bldg had to with the fact that the land was to small for the size bldg that Zudi wanted. When he found that he would have to raise the bldg to accomodate parking, the cost became prohibitive. Of course, Zudi started the building before he had final approval (a common Kara tactic)and he was left with a useless foundation. He told everyone that it was do to Old Bridge not giving him tax credits but that was BS.

Thursday, November 09, 2006 7:26:00 PM  
Anonymous Anonymous said...

Zudi always has a BS excuse at the ready. Anything to avoid having to ever fess up to any mistakes. The resident genius can never be at fault.

Thursday, November 09, 2006 9:07:00 PM  
Anonymous Anonymous said...

Regarding Z's headquarter building debacle. I saw this unfolding and stayed as far away as I could from it. No one did their homework like they were supposed to. Not the high priced architects from Princeton with their great ideas, not JR, KH's bogus head of Architecture, who didn't know where to begin, nor Z's attorneys who were watching his business interests, or anybody else hired for their expertise. Everybody, and I mean everybody, ran into it without thinking things through. All they were concerned about was making Z happy. Nobody did a code check analysis, feasability study, parking count study, area tabulations, prelim cost study, or any other due diligence prior to a bunch of money being spent. This is one perfect, and typical, example of Zudi not getting his money's worth from a bunch of highly compensated people that should never have been hired in the first place, which was compounded by the issue of Z not being a good business manager but being a very good BS artist (read salesman). He caused his own self inflicted wounds by surrounding himself with multiple rings of ass kissers instead of building a core group of competent professionals that could actually perform at corporate. Most of those losers are gone but not forgotten.

Tuesday, November 14, 2006 11:08:00 PM  

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