Friday, November 17, 2006

Kara Gets a Very Small Loan

The amount of the loan is for only $350,000 and will keep the company in business for about two weeks according to this article. The amount is probably about the amount that would have been needed to put a deposit on one of Kara's Tradewinds Homes.


TRENTON — Kara Homes Inc. can receive a $350,000 loan from Bear Stearns to stay in business for two more weeks, a judge ruled Thursday, despite arguments from its major creditors that the investment bank essentially would take control of all of the home builder's decisions.

The loan was less than the $2.6 million Kara sought from the investment bank to keep it in business for 13 weeks. But without it, the company wouldn't have met its payroll today and could have shut down.

Full article...


Anonymous disgruntled goat said...

I think it's a smart decision, after two weeks, the court can re-assess the direction (or lack thereof) of the reorganization efforts (or lack thereof) and work from there. The judge previously mentioned how he was concerned about the drifting nature of the case, maybe concern is giving way to impatience? Why let another lender get themselves in too deep simply to finance payroll and pay legal bills?

Anyway, 13 weeks seems like a long time to reorganize a business that employs maybe 60-70 people as of today, no? Laying off people on the lower end of the payroll is not reorganization, it's stalling. Nothing seems to be happening of much consequence, other than lawyers and lenders and creditors squabbling over who gets how much money and on what terms. If someone, somewhere, believed there was a real profit to be made by getting involved in financing any future construction, they'd be falling over themselves to get in on it. These assets are also capable of depreciating depending on the state of the real estate market. Current trends would indicate the value of these assets could possibly slide, which is obviously not in the best interest of the creditors or anyone else.

So let's see how well the crisis is Managed in these coming few weeks. maybe there's a plan in place that would provide for prioritizing their obligations to home buyers and municipalities, while also focusing on turning any available assets into cash with which to satisfy their main creditors. Then demonstrate the potential for profitability does exist long term, provided sound management is in place. Seems obvious enough. But then again, I'm neither a lawyer, a crisis management expert, or the greatest builder ever. I'm just an everyday cynic who's peeked behind the curtain a few too many times, among other things.

Friday, November 17, 2006 4:01:00 PM  
Anonymous Anonymous said...

I have a curious question for departed Kara Employees. Read the article at the link that follows. Was Kara Homes doing the same thing?

Friday, November 17, 2006 4:43:00 PM  
Anonymous Anonymous said...

Zudi was always robbing Peter to pay Paul. The problem was that Paul rarely got paid in full creating an even deeper hole.

Friday, November 17, 2006 6:56:00 PM  
Anonymous Anonymous said...

In response to your question about Kara and Coral Bay, the Attny Gen of NJ is already looking at Zudi and Kara. They are looking to apply the RICHO staute to Zudi, John Kelly and G Brandt. THis is a hard charge to make but I am also told that the Attny Gen is also looking at theft and larceny.

Zudi did use Kara monies to pay all of the bills for his house in Rumson, his admin actually paid all his bills for him (including is BMW)

It is just a matter of time before it converts to Ch 7. Today at the office there was a paper glitch and Kara could not pay any checks until Monday (we will see if we get paid) also Traxi forgot to request to pay the sales people so anyone in sales is not getting any money until next week (don't hold your breath)

In addition to all of this, we were told that all vacation time is now pre-petition and several employees who had vacations scheduled for the holiday's will not be paid (just put the knife in further)

I need to quit Kara ASAP, anyone need a site super????

Friday, November 17, 2006 10:01:00 PM  
Anonymous Anonymous said...

Now it's time to watch some inner circle heads roll. How many vice presidents does a bankrupt 50-person company need? After Uncle Hector grabs his last leftovers there are still around four or so plus whatever Zudi is now. What for, do they have to stay because Traxi needs their years of experience in losing tons of money?

Friday, November 17, 2006 10:51:00 PM  
Anonymous SCProfessor said...

I sense an amateur approach by Traxi to the situation. Despite claims to the contrary, I just don't sense an understanding by Traxi's leadership as to the unusual nature of residential builder reorganizations. Let's face it; unless you were around in '79 and '90, well you are not an expert.

The key evidence of this is the fact that Traxi appears to have taken an antagonistic role relative to the construction lenders. If I were in their position I'd begin every conversation with the phrase, "well partners we've got ourselves a real mess here."

What Traxi can and should do is develop a cooperative attitude with those secured creditors and recognize that through good deeds they can win their hearts (and limited construction financing to complete and sell the projects). Along those lines the first thing I would do is file an ex parte motion with the Bankruptcy Judge seeking an order excluding Zudi from entering Kara's offices or developments and doing any act which might be construed as interrupting the Debtor's efforts to organize. Do that Traxi and do it now. It is your only hope of gaining the confidence and perhaps limited access to the checkbooks of the construction lenders.

Oh and there was a reference in another posting here to the past relationship between Perry Mandarino and Bear Stearns. Best to immediately fully disclose that relationship to all creditors to eliminate at least the appearance of impropriety.

So come on Traxi, go ahead and profit on this advice. It doesn't cost you a dime and it provides the route to making a whole bunch of money by way of professional fees. Oh by the way. Don't act greedy. Those creditors watching your applications for professional fees are not going to be happy if benefits to them don't flow from the charges.......

Friday, November 17, 2006 11:08:00 PM  
Anonymous Anonymous said...

You have got to follow the link and read the article mentioned above. This sums up one shady businessman's ethics problems and his just reward for those actions. Based on enough concrete evidence of wrong doing, if the NJ state AG's office or any of the involved counties gain the courage to pursue a criminal investigation of the Wrinkled Suited One and his band of merry men their exploits will make national news, it will be that big and dirty. I guarantee it. When and if investigators move in, I am afaid the situation is going to be much, much worse than what you will have read in the article mentioned above.

I have been in the business for more years and worked with more people than I care to remember and can say with absolute certainty that they are the most corrupted and diabolical business people I have ever worked with. I won't go into how ZK made my head spin with his endless BS or the concern I felt working there every day wondering if I was going to find yellow police-line-do-not-cross tape around the building entrances and not being able to get my personal belongings back. Or the feeling that in some way, though I didn't do what ZK, JK, TJ, PG, JS, or CM did, I was supporting it just by being there in my cheap swivel chair. But I too was gut hooked by ZK, live and learn. Even if only one hundredth of what ZK and his band of merry men did is exposed let's hope it will be enough to get them their silver bracelets for a long stretch in the slam.

I am pleading now for justice in this case for the thousands ripped off by KH and also for all those illegal maneuvers that made all in the inner circle rich men at everybody's expense (including tax payers). They need to be investigated and indicted for justice' sake. There is so much easily gotten information to be had in this case because tracks were never covered and there were too many eyes seeing what was going on. There are phone records, canceled checks, deposits and withdrawals. Receipts of all kinds. Dates and places. Homeowner, buyer, ex-employee and banker statements waiting (and wanting) to be taken. This mess is Enron, Tyco or WorldCom all over again. It is the responsibility of NJ's lawmakers to get up and take a tough stand once and for all that enough is enough, that it can't go on like this any more. They can't sit on their hands on this one no matter how much they would prefer it. The citizens they swore to serve have been severely wronged and there is a lot of pain out there. It's up to them now to step up and help shore up the sagging confidence of our neighbors and friends, and restore confidence for potential future buyers into our new communities. NJ's building industry woes will not end any time soon unless confidence in the system can again be restored by those in powerful places. We want to rely on you, Mr. Lawmaker, to do the right thing so we can move on with our lives and take care of our familes knowing that justice has been served. Please look at this situation, please. I beg you. Put these guys away.

Friday, November 17, 2006 11:26:00 PM  
Anonymous Anonymous said...

Amen to you. Put him in jail. They won't be finishing Galloway Woods or any other site with that kind of dough. They'll need to take alot of stuff down to the stem walls. It's just a bandaid is all. Traxi seems like a let down too but lets see what happens next week.

Friday, November 17, 2006 11:50:00 PM  
Anonymous Anonymous said...

As you can still see that Kara with all its brainiacs at Corp. Still never put a plan in place. Like everything the big wigs did nothing like usual but still collecting a check. Even with Traxi in place the daily workings of the sites still need us little pee-ons to get it done. Most all of Kara's sites all had very complex issues and inless you were directly involved you will need a de-coder to figure it out. Oh well too bad, good luck Traxi. LOL

Saturday, November 18, 2006 12:40:00 AM  
Anonymous Anonymous said...

At a big company wide meeting a few years ago, Zudi openly endorsed the policy of putting off paying our vendors by offering them more work in exchange for letting us slide. Isn't there a word for accepting professional services and goods without intending to pay for them as promised?

Saturday, November 18, 2006 3:33:00 AM  
Anonymous Anonymous said...

"If you know anything about me, the words can't and wait are not in my vocabulary" - Zuhdi Karagjozi

I bet you can't wait now.

Saturday, November 18, 2006 6:33:00 AM  
Anonymous Anonymous said...

Kara's attorney, at the last hearing, indicated that the 21 affiliates that filed would be 25 affiliates at the end of the day.

Does anyone know which affiliates the other 4 are?

Saturday, November 18, 2006 7:46:00 AM  
Anonymous Anonymous said...

Zudi has almost no control now and soon he'll have none at all. There's a real good reason no one wanted to front Zudi more dough. Soon these Traxi people will have no use for him either, or for his accomplices. The hunt for the missing money will just follow the slime trail & guess where it ends? If I was someone trying to figure out where millions of dollars went, I might start by checking into the ones with the biggest houses most properties and highest salaries, wouldn't you?

Saturday, November 18, 2006 11:04:00 PM  
Anonymous Anonymous said...

Does any one in the field know how to read plans. Some of us remember trussus that do not work. as-builts that never made it to the townships. Letters from engneering saying it's to keep building we will supply AS-BUILTS in order to keep BUILDING .Some plans still do not work. Still waiting for changes Joe R is taking care of it. Don't worry build it we will fix it later if it is caught. The Buckingham floor trusses need more collums in basment to support12 EXTRA FT under power Lamb load to much deflection in floor more so when you add conservatory. Do people remember. NO NO those people got let go for Knowing how to build correcly and not want to cover up when you tryed to speak to ZK TG TG PG JK GB HP at the meeting they would shut you up and move on to other issues like how many are we closing here give me 5 more I need them when you spoke up no one knew how to do there job . Zudi had no right to build homes he did not no enough only how FAST we can go how fast we can Grow. we will fix it later straps missing the township inspectors pointing out what is missing in the frame stage it would 4 or 5 times to pass frame inspections thewn get 1 right we would have to beg inspectors to let us insulate and do a recheck on insulation inspection and repairs would not be done from frame punch so how do you move on when the township lets you move forward and repairs are not done How many homes are missing something because the township would trust Kara and what was to be done is not all the inspectors out there would do Kara's job and kara would not do there to the inspectors it came a time that to many things were not done so a frame could not pass because no one in the field knew what they were looking at to many sets of plan no one knew what set the town had and when the town would come out for inspection either the town or construction would be Building or inspecting off the wrong PLANS figure that one out..

Sunday, November 19, 2006 2:55:00 AM  
Anonymous Anonymous said...

Don't you worry one bit young man. Zuhdi and the inner circle of buffoons will work everthing out in due course. They're working diligently (probably as I write this) to figure out which Carribean countries DO NOT have extradition treaties with the United States.

Sunday, November 19, 2006 7:50:00 AM  
Anonymous Anonymous said...

You can't count on that happening any more. Zudi was told many times he should go to Forida before it was too late but he wouldn't listen. Now it is too late and he can't hide the evidence as much as he has tried because there is just so much.

I think to get it right the Gov't will work slowly and deliberately, carefully tightening the noose around ZK, GB, TJ and JK's necks, constantly increasing pressure before they realize all the lies in their vocabulary won't help them out of this one. Let's hope and pray for justice. He used to be a real mensch but now he is just another schmuck. I think he will be schtupped good this time.

Sunday, November 19, 2006 11:53:00 AM  
Anonymous Anonymous said...

For the AG to be looking at Zhudi or actually pursuing a criminal investigation are worlds apart. Am I splitting hairs here? BTW, SC and DisGoat, thanks for the new posts. You're a great resource.

Sunday, November 19, 2006 12:41:00 PM  
Anonymous SCProfessor said...

If your AG is anything like ours, well it is a political appointment. That brings into play a scary side of politics; selective enforcement of criminal laws. If there is criminal activity here, then it would be of the white collar variety. These cases are often complex and difficult to prove. No AG wants to be on the loosing side of one of these cases.

If I were a betting person, I would not give much of a chance for Zudi to be charged of a crime and even a lesser chance that he will be convicted. Just my $0.02 input. Take care,


Sunday, November 19, 2006 1:27:00 PM  
Anonymous Anonymous said...

I agree, the RICHO statute is very hard to prove let alone get a conviction.

What I think is interesting are people like Zudi really think they are going to pull it our. Also the biggest joke on the street is Zudi sitting ont this Board of Directors. He is still running the day to day and Traxi is in the role of CFO. Zudi still is paying his sales staff to sit at their houses while he hopes the DCA will let him sell houses soon.

Has Kara had any closings since this the Ch 11 took place? They were supposed to close 9 homes, whatever happened????

Monday, November 20, 2006 3:49:00 PM  
Anonymous Anonymous said...

The buyers are trying to get out here contracts

I would be scared to move into one of those homes, especially since they've been sitting for months

I believe any homes that he tries to sell now will go on the MLS, I don't think there are any sales people left, unless you are counting the security guards, they are probably there more than the sales people anyway(at least some of them)

Monday, November 20, 2006 4:21:00 PM  
Anonymous Anonymous said...

There are no security guards. Just a couple of employees riding through the developments. Very secure.

Monday, November 20, 2006 6:04:00 PM  
Anonymous Anonymous said...

Attn Kara inner circle & true believers. "Pre-petition" means it happened before the petition was filed. "Post-petition" means it happened after. Some things can't be fixed with a little white-out. Chap. 11 is not a "legal thing" that will just magically disappear all of a sudden & Zudi's not going to be calling you. Adapt, evolve, and deal.

Monday, November 20, 2006 6:05:00 PM  
Anonymous Anonymous said...

Few quick answers:
1. They closed a house on Friday and 2 or 3 more are set for this week.
2. There are security guards everyday on every site from 6pm until 7am.
3. There are still sales people on staff-not quite sure of the exact number but it is between 3 and 5.
4. Finally the individual that had the rambling post regarding all of the construction, structural, architectural issues that he had to deal with might have been more sucessful if he had done to things; Passed High School English and walked his houses. You don't fail a frame or any other inspection 5 times if you check on the work that was done to correct the errors.
In addition, to the same individual, it's not a "power lamb" it's a parallam. The fact that this company had someone as ill versed as this individual in construction gives a new perspective as to where they stand today.

Monday, November 20, 2006 7:59:00 PM  
Anonymous Anonymous said...

SO we have a Zudi zealot on the board. THat is great!!! So out of the 9 or so homes they closed 1. Am I the only one that thinks this is a problem???

You have security guards onsite but there was a theft at Birch Hill over the weekend that is a top notch security team.

You have a sales team that is unable to sell. That just screams waste of money!!!!! Also who is going to buy a home from Kara now?? Most likely someone who is going to look for a hell of a good deal, (there is blood in the water)

YOu have a company that could not pay people on Friday due to the fact that they didn't have the right check signers on staff. (I heard a bunch of people walked out)

You have employees who are currently working who lost their vacation time which caused people to walk out.

I agree with you about the rambling posts but again it is Zudi's company, Zudi's family that hires the people and Zudi is the one that needs to be held responsible.

So you can talk up Kara all you want but just wait for the other shoe to fall.

Monday, November 20, 2006 10:59:00 PM  
Anonymous Anonymous said...

With all due respect, the last line of this person's post indicates they are hardly a Zudi zealot. Actual information is always appreciated. He/she was also right re: rambling unreadable posts, I mean Ben Franklin invented punctuation for a reason: to protect the freedoms of people like you & me. So learn it, use it, or get the hell out of my country!

Tuesday, November 21, 2006 1:00:00 AM  
Anonymous SCProfessor said...

If there ever was a bankruptcy setting where time was an enemy with regard to the chances of a successful reorganization, Kara Homes fits that definition.

If you have spent any time on this site then I'm sure you are aware of the fact that the values associated with newly constructed homes have been decreasing due to either price reductions or buyer incentives. On the Left Coast for example we are seeing 20%-25% discounts in new housing prices over their prices six months ago (see ) "In Sacramento, Centex Corp. has slashed home prices by about $100,000, bringing down the average price of its new homes to less than $400,000."

Here we have the Debtor estate being hit from five sides. First, the weather and damage associated with not winterizing construction sites. Second, the continued interest meter ticking, increasing the amount of secured debt. Third, declining real estate prices. Fourth, the increased administrative expenses associated with the hiring of bankruptcy professionals. Fifth, the negative image of Kara and the potential that it will not be around to fix warranty and construction defect claims.

With these five adversities, it won't take long for this ship called Kara Homes to be completely under water and sink.

Tuesday, November 21, 2006 2:00:00 AM  
Anonymous Anonymous said...

Far from a zealot or a kool-aid drinker. Just one of the remaing few. I am just so tired of the rumors and misinformation, I just wanted to clarify a few things and try to give one of our less than literate former co-workers a dose of reality.
Just a few facts as opposed to most of the "facts" that are posted here.
1. We did get paid on Monday. Yes there was a glitch on Friday, but checks were there as promised on Monday. Not for nothing but this is the first time that the HR and Accounting staff have been through this process and they are trying to make it work as best they can.
2. Technically aside from the Horizons comunitees which are under DCA restraints, they still can sell on other sites. They can't take contracts or deposits, but they are allowed to show homes and attempt to work with perspective customers.
3. The vacation issue was worked out and to the best of my knowledge no one quit over this matter. There are employees out this week-with pre-approved vacations that will be compensated for this time.
4. The only employees that have quit are those that have offers with companies that are currently more stable.
5. Just out of curriosity how did you hear about the incident at the Horizons job in Old Bridge? I don't think it was in the papers.
Just trying to cut down on the BS and rumor garbage usually posted on here with some actual facts, from someone with no ax to grind.

Tuesday, November 21, 2006 8:00:00 PM  
Anonymous disgruntled goat said...

Thanks for posting some facts, former coworker. Happy Thanksgiving to all former and current coworkers, including Mr. Empty Pockets and his faithful conga line. There's no reason a person can't grind their axe and be civil at the same time.

Re: vacation days. Will someone at corporate pleased do me a favor and look around for my vacation time? It was misplaced, the last time I recall having it, I was somewhere near the HR department. It could be under a pile of check requests or something else that hasn't been touched since early October. If you find it, kindly leave it someplace where there's no chance any other person will accidentally find it, like inside one of the clubhouses for example. Then let me know via this blog. I'll use my Kara coffee mug to slip through security & I'll pick it up. Thank you in advance!

Wednesday, November 22, 2006 1:00:00 AM  
Anonymous SCProfessor said...

Anon 8:00 & Disgruntled Goat:

You have both exhibited the sort of "high road" posting that I think helps the situation by providing factual information and leaving out the personal attacks that probably do more harm than good. The insider's perspective is certainly helpful for people outside of the organization who simply want to have an idea of what's going on as they wait for a resolution of their own personal situation.

We all have our motives for posting. Since I do not know or have any connection with anyone from Kara you may be asking yourself why I hang around and express my views. The reason is simple. I've been involved in a number of these types of cases and seen the "deer in the headlights" face of those whose life has been terribly impacted by what has happened here. I've always felt it ridiculous that they are led down the garden path with false hopes of recovery when they should be told early on what's going on and given some idea of timeframes and their chances of seeing some money at the end of the road.

I had some hope that this case would be different since is appears that someone with the Unsecured Creditors' Committee had created a blog that I think was intended to provide updated status reports. Unfortunately no effort has been made to provide updated information since a few days after the blog's creation.

Anon 8:00, the second point in your posting relating to sales people "can't take contracts or deposits" is a bit troublesome. My guess is the problem specifically relates to a vacancy in Kara's real estate broker position. I'm guessing but I'd be willing to bet that Zudi's mom Rose has been relieved of that responsibility and without a responsible managing broker New Jersey real estate licensing laws would be violated in taking contracts.

That of course brings up an interesting point. With some 300+ contracts out there, who would want to step into that hot seat and potentially inherit the problems associated with them? Answer of course is no one unless the Debtor simply rejects all of those contracts and then offers new contracts to original buyers where it makes economic sense.

Of course how many original buyers out there will want to pay 6 months ago prices for these places, particularly if they do not receive credit for their original earnest money deposits.

Oh and can you imagine the cost of the additional paperwork associated with getting Court approval of these transactions. I'm sure they will be structure in a manner that basically transfers secured claims to sales proceeds designed to settle out claims at a later stage of the proceeding. But in each instance expect secured creditors to go over the charges with a fine tooth comb to insure the transactions don't contain any funny business. Also expect lender demands for their claims to include costs and charges associated with the default condition of their loan (late charges, default interest rate claims, attorney fees, etc.).

One final comment directed at Anon 8:00. In the fourth item you state, "The only employees that have quit are those that have offers with companies that are currently more stable." My sense is that is probably not accurate. No doubt people have left without having a job to go to, because of the toxic nature of these situations. Simply put, it isn't healthy to live under the uncertainty associated with being on the mop up crew of a failed business.

Spend what ever time is available during your work day to network with others and find a new position as soon as possible. Traxi can live without your valuable input (or they can pay you for your time to come in and help at a time of your own choosing).

Oh and if they really want your input after you've quit, base your hourly rate so that it measures up to what they are charging this Debtor Estate. If they are worth it, you certainly are too.

Take care all and given the circumstances, have the best Thanksgiving possible.


Wednesday, November 22, 2006 10:30:00 AM  
Anonymous Anonymous said...

There will be no Thanksgiving or Christmas for the homeowners whose deposits have been stolen by these crooks!!!!

Wednesday, November 22, 2006 11:46:00 AM  
Anonymous SCProfessor said...

Anon 11:46, sadly your comment is true. I think many of us miss the point that these "customers" did nothing more than rely upon the promises of Kara Homes. That is they exchanged money they owned for a promise of a completed home. We are fortunate in my State to have consumer protection legislation in place that requires deposits on new homes to be held in a neutral escrow until the sale is closed.

If all involved want something positive to come out of this Bankruptcy, my suggestion is you contact your state legislator and asked that similar legislation be passed so this situation can be avoided in New Jersey. No doubt it will face stiff opposition from the builder association lobbyists, but at an opportune time like this, when the wounds are open and fresh, there may be a chance it will become law.

Wednesday, November 22, 2006 12:52:00 PM  
Anonymous Anonymous said...

While SCProfessor obviously has a great deal of bankruptcy knowledge, he really doesn't have all the facts in the Kara situation. Just a few more:

1. Many of the 300 contracted homes are agreements signed well over 1 year ago. Some were even contracted approximately 3 years ago. Therefore, a large percentage were signed at prices still well within, and even below, current market values. Given the choice, the majority of these purchasers would rather close on their homes than walk away with nothing.

2. There is not a "broker vacancy." Closings are continuing with the broker of record intact.

3. No purchaser that has closed has "lost" their earnest monies.

The people that have their life savings riding with this company deserve the facts. I am sure that some of you bloggers are just trying to be helpful, but you really may be doing more harm than good. Your conjecture is just giving people a feeling of hopelessness. While I believe everyone involved should be prepared for the worst, there really is no harm in holding out some hope.

Everyone needs to take a break and do their best to enjoy time with their families this the end, that is the only thing that really matters anyway.

Wednesday, November 22, 2006 1:24:00 PM  
Anonymous Anonymous said...

Hopefully, new management can address the issues facing the buyers who've been waiting and waiting to close on their homes, because Zudi and Co. has already proven that they're not up to the task. These issues have been festering for years and the cheap band-aid fixes offered by upper management accomplished nothing of any substance. These problems blew up into major issues while the circle was busy wasting time on projects that never were, their own properties, and on feeding each other's egos. It's time for them to pay the price, give 'em the boot and leave the business in hands that might actually accomplish something that benefits someone else, like customers for example.

Wednesday, November 22, 2006 3:33:00 PM  
Anonymous SCProfessor said...

Anon 1:24 said, "[G]iven the choice, the majority of these purchasers would rather close on their homes than walk away with nothing."

The problem with this statement is that it ignores the realities of the Bankruptcy Code that are designed to provide equal treatment for all creditors. Instead of using real property let's make it simple by making the contract deliverable gold bullion. Say you as the buyer have a contract to buy one ounce of Gold from KARA for $400 that was entered into 2 years ago. Today's price happens to be $630/oz. Of course, you are hopeful that Kara performs because you could immediately sell it and profit $230. You tender your $400 and Kara simply under Section 365 of the Bankruptcy Code rejects the contract. Are you out your profit? Well perhaps you have a $230 claim that will receive a pro rata distribution of funds available at the end of the case. Good luck on that claim, particularly since it sits at the end of a lot of other claims with higher priority that will likely exhaust that pot of money at the end of this rainbow.

The problem here that I'm attempting to avoid is raising false hopes by showing that bankruptcy law is different and has a single unique purpose. That is the equal treatment of all creditors of the estate. In that regard Anon 1:24 has raised an interesting question through the statement, “No purchaser that closed has ‘lost’ their earnest monies.” What troubles me about this claim is if pre-petition contracting parties have closed on their homes and received credit for their earnest money deposits it seems to me that they are being treated differently than other purchasers who stand to loose their entire deposit on transactions that will likely never close.

I guess what I’m saying is I’ve simply been involved in too many situations where false hopes simply extend the time period associated with the painful process of grieving a loss. What I think is more appropriate is providing a realistic assessment of the outcome so people can reach the point of acceptance and move on.

Take care all....

Wednesday, November 22, 2006 7:04:00 PM  
Anonymous Anonymous said...

Zudi, please kill yourself, you have ruined my life and that of my employees.

Monday, November 27, 2006 3:46:00 PM  
Anonymous SCProfessor said...

The above comment illustrates why these financial collapses are not victimless in nature. Lots of good people are going to get hurt in this process and it does little good to extend the pain by dragging the affairs of the debtor's business out. If this blog is being monitored by the major creditors of this Bankruptcy Estate, let the Court know that creditors feel the way they do.

Monday, November 27, 2006 5:50:00 PM  
Anonymous Anonymous said...

SC prof,
While I understand that you feel for those that have lost a great deal in this fiasco, I find it reprehensible that you give any credence to the poster that wished for Mr. Karajgozi to kill himself.
The fact that you think that this individuals opinion should in some way be passed onto to the court not only shows a lack of common sense on your part, but also a real lack of knowledge as to how internet forum/blogs such as this work.
That you might think that any court would put any credence in any postings on a nameless-faceless internet blog is reason enough to discredit any so called "expert opinions" you might have offered in the past or will post from here foward.

Monday, November 27, 2006 7:20:00 PM  
Anonymous Anonymous said...

Another quick question for you. I realize you are quite the outsider in this fiasco and as a pseudo expert you enjoy posting on this forum. The problem is a great deal of people whose lives are actually affected by this situation put faith in your opinions. While I understand that anyone who would put their faith in an "internet expert" gets what they deserve, how did you can you rationalize in your own mind, as an expert, making any statement on this case by using only the information gleaned from this forum, a few News articles and the initial bankruptcy statement. Do you know how much the loans on the jobs were? Do you know what the equity in each project is based on the improvements in versus the cost to completes. Do you have any idea as to how one of the LLC is performing as opposed to another one? With your limited information on this specfic chapter 11 how in good conscience can you state any of the vague rhetoric that you do. While I'm quite sure it makes you feel that you are quite important by posting your less than valid opinions here, please remember you have far from enough information to have any real opinion on this topic.

Monday, November 27, 2006 7:48:00 PM  
Anonymous Anonymous said...

To Anon 7:20 - Why don't you take a chill pill and relax. SCProf didn't agree with the poster, but merely said that the general feelings of those destroyed by Zudi should be brought to the attention of the court. Would you have felt better if they suggested Zudi flee the country and never be held responsible for the mess he created? I for one have enjoyed SCProf comments, insights and predictions. Some of which have actually come true in recent weeks. If for one minute you think that all parties that have an interest in one way or another in this bankruptcy have not read some or all of the posting since Oct 5th you must be living on another planet. Just in passing conversations, I have heard people mention this blog! Posters have stated in the past that parts were emailed to different parties in this case. Just out of curiousity and since you brought it up....what is the real purpose of this blog? Relax, have a nice cup of tea and chill out.,...jeez!

Monday, November 27, 2006 7:59:00 PM  
Anonymous Anonymous said...

What the heck is wrong with everyone tonight? Maybe you should take a minute to reread some of SCProf previous postings. I have and I didn't find one time when he referred to himself as an "expert". Secondly, he stated in the very beginning he had no prior knowledge or dealings with KH or ZK before googling bankruptcy. SCProf has always said in his posts that his infomation was based on bankruptcy facts / laws and not specific to KH!! Just out of curiousity, do you have anymore information on KH than what you read in the newspapers, court filings, or rumors from the inner circle. I am willing to bet the answer is no. Like someone said to another poster earlier CHILL OUT!!!!!

Monday, November 27, 2006 8:07:00 PM  
Anonymous Anonymous said...

There's no need to wish injury or harm upon anyone especially over money. I dislike Zudi as much as anyone else here does but that doesn't mean I want him or anyone else to die. Please think this kind of bullshit through before you say it.

Monday, November 27, 2006 8:19:00 PM  
Anonymous Anonymous said...

While I am glad that you enjoyed reading the Profs posts and true some of the things he has said did come true. On the other hand some of Nostadamus predictions came true. It's another case of if you throw enough crap at a wall some is going to stick. I am just of the opinion that someone who doesn't have all of the facts should mind his own business as opposed to give me credence to the BS rumor mill that is out there now. The prof needs to realize that some take his words as gospel and it affects the way they live their lives.
Prof-this isn't some hypothetical case in one of your text books-it's the real world affecting real lives and your constant negative slant on it is neither needed or helpfull in this situation.

Monday, November 27, 2006 8:29:00 PM  
Anonymous SCProfessor said...

Anon 8:29 et al. I have said repeatedly that I do not have all the facts relating to Kara Homes. I do however have a wealth of experience in bankruptcy settings like this. If you read my posts you will see that I consistently indicate that what I’m saying is based on these past experiences. I am of the opinion that probably the worst thing that can be done to unsecured creditors of this or any other bankruptcy proceeding is to keep them in the dark. Unfortunately that is most often the case. What I am able to do is to make a best guess, based upon past experiences, of what will happen next. I suspect if you read my past guesses, they have been pretty much on the mark. In each instance I have provided the basis (usually by quoting the particular bankruptcy section), of what I think is going to happen.

My opinion has been all through this proceeding that this case is headed towards liquidation. My opinion remains that Chapter 11 liquidating plans are simply a waste of money when things could have been done faster and less expensively in a Chapter 7. Each has the same results but you would eliminate the need to have an unsecured creditors committee (and its list of professionals). You would also eliminate the need for Traxi and Kara’s management. A professional trustee, appointed by the U. S. Trustee’s Office would fill all those roles.

I suspect few that read this Blog would reach your conclusion that my comments are “crap.” Do they put the Debtor’s management and professionals in a bad light? Probably. However, they are just as free as I am to place comments on this Blog and explain their actions. If they don’t agree with my analysis, I would certainly welcome their comments on this Blog as would others.

Monday, November 27, 2006 10:11:00 PM  

Post a Comment

<< Home