Thursday, November 30, 2006

Kara Unsecured Creditors Blog

"On November 20, 2006, the Court entered an interim order approving debtor-in-possession financing in the amount of $350,000 from Bear Sterns Investment Products, Inc. ("Bear Sterns"). The interim order authorizes use of the $350,000 in conjunction with an approved budget which is designed to meet some of the Debtors' emergent needs, including, among other things, insurance, security for the developments and payroll. "

Full text link to Kara Homes Unsecured Creditors Blog

243 Comments:

Anonymous Anonymous said...

Check out this article in my local paper. It seems that Kara has listed, as an asset, property that he appears to not own? Wonder if this is the only one...

http://independent.gmnews.com/news/2006/1129/Front_page/009.html

Thursday, November 30, 2006 8:50:00 AM  
Anonymous SCProfessor said...

Yesterday the Asbury Park Press indicated that two towns were going after Kara's bonding companies for claims on their performance bonds relating to uncompleted work. Today's paper add an additional two towns. See article below:

http://tinyurl.com/sdup8

4 towns go after builder's bonds

Funds sought to finish Kara Homes projects
Posted by the Asbury Park Press on 11/30/06
HARTRIONO B. SASTROWARDOYO, SHRUTI MATHUR
AND ZACH PATBERG
MANAHAWKIN BUREAU

Four southern Ocean County municipalities have become the latest towns to go after performance bonds issued by developer Kara Homes, to pay for what township and other officials say are needed improvements at developments built by the company.

Performance bonds are issued by an insurance company to guarantee successful completion of a project.

East Brunswick-based Kara Homes filed for Chapter 11 bankruptcy reorganization Oct. 5, leaving many housing developments in Monmouth and Ocean counties unfinished. The municipalities hope to use the performance bonds to complete various work at those developments.

"Some developments are worse than ours," said 43-year-old Dawn Evers, who owns a house in the Kara Homes' Winding Run development in Little Egg Harbor.

On Nov. 20, Marlboro was the first town in the region to pursue the developer's performance bonds as a possible recourse. Now Little Egg, Barnegat, Berkeley and Stafford officials have said they are exploring that option, with Barnegat and Berkeley possibly beginning proceedings as early as next week.

David Breeden, township administrator for Barnegat, said the township put the bond company, New York City-based Gulf Insurance, on notice on Nov. 3, and would institute proceedings to redeem the $4.86 million in bonds if Barnegat didn't receive a response within 30 days.

Barnegat has two Kara Homes developments, Horizons at Barnegat, a 164-unit age-restricted development off West Bay Avenue, and the 20-unit Sterling Woods at Barnegat, off Route 9 near Georgetown Boulevard.

While all the homes have been completed at both developments, Breeden said about $750,000 in site work is outstanding at Horizons, including landscaping and drainage not associated with individual homes or with the clubhouse.

"They (Kara Homes) haven't finished putting in retention basins, they didn't finish landscaping, including replacing trees and plants, and there's problems with grading between homes," which causes water to pool, said John Petrillo, president of the board of trustees at Horizons.

Breeden said Wednesday the township has not heard from Kara Homes or Gulf Insurance. The Township Committee meets Dec. 4 and could make a decision then about what Barnegat's next step will be.

"What we want Kara to do is live up to their commitment and perform the necessary repair work. Pursuing the bonds is a lengthy and costly process, one of last resort. But we will do it if necessary," Breeden said.

Patrick Sheehan, attorney for Berkeley, said his township, which called in the bonds about two weeks ago, also has not heard from Gulf Insurance or Kara Homes. If no response is received within a week, Berkeley officials plan to pursue action in Superior Court, he said.

In the 24-unit Lenesy Estates in the Bayville section of Berkeley, work still needed includes paving and repairs to a drainage basin, Sheehan said.

"We're going after the full amount of the bond, about $255,000," he said.

Little Egg began pursuing bond money several weeks ago when officials realized Kara Homes was unable to complete work, Township Administrator Ray Urezzio said Wednesday.

Little Egg has four Kara Homes developments: Winding Run, Hartley Estates, Waters Edge and a few homes in the Atlantis neighborhood.

Urezzio said he did not how much money the bonds would generate. He also said he was unable to give specifics on what work needs to be completed, but he does get calls about unfinished roads.

Evers said the roads leading into Winding Run need only another layer of blacktop.

"At least we have blacktop," she said.

Evers said the neighborhood also has problems with drainage. Several sewers are only partially open, with wooden grates covering them. This has led to flooding in the neighborhood, especially in heavy rain, she said.

However, Evers is pleased with the response she has received recently from Kara Homes workers, who have fixed problems that they can do without contractors.

"Right now it's hard to say anything too horrible because they've really been responsive. What I am worried about is what happens down the road," she said.

Stafford is also trying to foreclose on its Kara Homes bonds. Township Administrator Paul J. Shives said the performance bonds were shipped about a week ago to a lawyer, who has been authorized to act on them.

"Our stance is, we'll take it all and finish it," Shives said of attaining all the bonds to complete certain developments throughout town.

Stafford has five Kara Homes developments, and the project most in need of improvements is at The Landings at Manahawkin, which still has curbs missing and storm sewers not operating properly, Shives said.

Thursday, November 30, 2006 9:54:00 AM  
Anonymous SCProfessor said...

Anon 8:50:
It is not uncommon to see assets overstated and liabilities understated on Chapter 11 reorganization petitions. That of course serves as a basis for claiming, "all of this equity will be lost unless we are allowed to reorganize and pay our creditors all they are owed."

Thursday, November 30, 2006 10:06:00 AM  
Blogger ajgoodman said...

Asbury Park Press reported earlier this week that Bear Stearns is considering a larger role to relieve the banks of their debt. “In a related development, Roseland lawyer Paul Kizel, who represents Bear Stearns, on Monday told Kaplan the company is not just interested in providing financing to Kara. The investment house also is exploring the purchase of Kara's debt from the banks, he said.”

Thursday, November 30, 2006 10:35:00 AM  
Blogger ajgoodman said...

Asbury Park Press reported earlier this week that Bear Stearns is considering a larger role to relieve the banks of their debt. “In a related development, Roseland lawyer Paul Kizel, who represents Bear Stearns, on Monday told Kaplan the company is not just interested in providing financing to Kara. The investment house also is exploring the purchase of Kara's debt from the banks, he said.”

Thursday, November 30, 2006 10:36:00 AM  
Anonymous SCProfessor said...

ajgoodman:

I understand this "dual" role Bear Stearns announced to the Court has created a real problem for the case. Seems the construction lenders were contacted by Bear Stearns directly about the possibility of buying their loans at a discount. As a result, the construction lender's figured they were being snookered by this insider's action.

Apparently in response to this the construction lenders have sought Court permission to schedule depositions of Bear Stearns' personnel on an expedited basis (see http://www.karahomescreditors.blogspot.com/ -- "To that end, there has been established an aggressive discovery and deposition schedule over the next week to address the concerns and objections raised."

Guess what you could say is we've got a "cat fight" going that involves a "Bear" and a bunch of "Sharks." Should be interesting.

Thursday, November 30, 2006 11:06:00 AM  
Anonymous Anonymous said...

Again, I ask this question, how many homes has Kara closed since the filing?

The reason I am curious is that they asked, in the beginning to close 9 homes with the proceeds going into an escrow account, now they want to close 10 more.

If they did close the 9 whose decides how to divy the money. If they did not close those homes isn't that a black mark against Kara in the judges eyes?

Thursday, November 30, 2006 1:36:00 PM  
Anonymous Anonymous said...

Where does it say that Bear Stearns contacted the banks directly?

Thursday, November 30, 2006 1:40:00 PM  
Anonymous SCProfessor said...

Anon 1:36
My understanding, and this is second hand info at best, is that they have closed on a few of the homes, perhaps in the neighborhood of 5 to 7. Pursuant to the Court's order, funds are being held in a blocked account for each sale, subject to further order of the Court relating to disbursements. You can see this arrangement is described on the unsecured creditors’ committee blog "titled--summary of motion to continue sale of homes." It is simply a mechanism where liens are transferred to sale proceeds and the Bankruptcy Judge will later decide on their distribution.


Anon 1:40
I heard this second hand from a person at who attended last Monday's hearing. Seems attorneys for the construction lenders indicated to the Judge that this was happening (showing letters from Bear Stearns). The attorney for Bear Stearns admitted that it was happening. This admission is reported in the article quoted above.

If Kara employees or others have reliable first hand information it would be nice to let those asking these questions "hear it from the horse's mouth."

Thursday, November 30, 2006 2:37:00 PM  
Anonymous Anonymous said...

Is anyone aware that Zudi's four main henchmen alone account for 10K a week in salary? Merely cut that in half & you have 5K a week more to put towards something productive instead of paying them to sit & wait while someone else comes in to do what they couldn't. I hope I manage to land a job like that someday, one where you're safe no matter how far south the company goes. But getting rid of them would make too much sense & none of this is about sense. It's about greed and getting in line to pick off the scraps of Zud's meltdown & nothing more and fairness has nothing to do with it.

Thursday, November 30, 2006 4:59:00 PM  
Anonymous Anonymous said...

Hey, just tried to call Horizons @ Birch Hill and Hawkins Ridge/Sterling in Monroe and the phones were turned off in the sales offices(you get the phone company message). Is this a precursor for what is to happen on Friday???? Maybe the heat will go next!!!!

What do anyone think Traixi stance will be if they do not get approved for the funding?? Is it a black mark on them???

Does anyone want to give odds on Kara getting funding/not getting funding???

Kara seems to luck out at most of these hearings.

In simple terms is the Bear Sterns offer to buy out existing debt a good thing or bad thing for the existing employees???

Thursday, November 30, 2006 5:57:00 PM  
Anonymous Anonymous said...

I hear Uncle Hektor is out the door this week, wonder if he got a severence package?????

With Hektor gone I bet GB goes gunning for Robbie. I think she can take me!!!!!!

Thursday, November 30, 2006 5:59:00 PM  
Anonymous Anonymous said...

It's going to get interesting now as the remaining true believers start "gunning" for each other as the heads slowly start role. The're all going to be clamoring for favorable position in their master's court and try to convince the mogul(and everyone else)of just how indispensably important they are to the organization.

Thursday, November 30, 2006 7:04:00 PM  
Anonymous SCProfessor said...

Anon 5:57 asked, "In simple terms is the Bear Sterns offer to buy out existing debt a good thing or bad thing for the existing employees???"

Well, my assumption is that anything that interrupts for flow of money from Bear Stearns to fund day-to-day operations is what you'd characterize as a "bad thing for the existing employees." I say that initially because I'm not sure staying around just to collect a paycheck is really a good thing. There is some obvious benefit relating to getting away from the drama and continuing down a new path, with new employment in a stable work environment that could be construed to be a good thing.

My sense of things is that particularly for this Bankruptcy Judge (who having just resigned as a city mayor, has only been sitting on the bench for about a month), can't be happy about Bear Stearns action that might be construed as at least having the appearance of being a squeeze play on unsecured creditors.

I guess that if he were right on the fence on a decision to convert the case to Chapter 7 liquidation (or appoint a Chapter 11 Trustee) at tomorrow's hearing, I think he would do so given Bear Stearns action.

If Bear Stearns had said upfront that they were going to act as lender and at the same time attempt to buy secured claims it might be a different story. But they were not open and in the Judge's mind (I suspect) that sort of non-disclosure isn't appropriate. Somewhere I recall it being said, "the principle that 'even the appearance of impropriety is improper' stands as a firm, strong guide to conduct."

Take care all. I like others who are too distant to be in Court tomorrow, would love to get some feedback as to what happened.

SCProfessor

Thursday, November 30, 2006 7:06:00 PM  
Anonymous Anonymous said...

I wonder if Robbie collected Uncle Hector's shirt, phone, laptop, and keys? I wonder who will be hosting Christmas dinner this year for the Zudi clan.

Thursday, November 30, 2006 9:04:00 PM  
Anonymous Anonymous said...

Hey, (current employees) did anyone notice that there was no medical deductions from our paychecks this week and last week.

Does anyone know whats going on?? I tried to get info from corporate but nobody is answering me

Friday, December 01, 2006 10:21:00 AM  
Anonymous Anonymous said...

FYI:

http://www.app.com/apps/pbcs.dll/article?AID=/20061201/NEWS/61201015

Bankruptcy judge told Kara Homes needs financing deal to survive
Posted by the Asbury Park Press on 12/1/06
BY DAVID P. WILLIS

TRENTON — The chief restructuring officer for beleaguered builder Kara Homes Inc. today told a bankruptcy judge that a $2.6 million loan from Bear Stearns is the only funding available to the company.

"It was necessary financing," said Perry Mandarino, in recalling what he told Kara Homes' board of directors. "It was the only financing available and it was on reasonable terms."

Kara Homes is trying to convince Judge Michael B. Kaplan to allow the loan to go through, so it will have enough money to pay administrative costs, rent, insurance and security for its developments. Two weeks ago, Kaplan allowed Kara to receive $350,000 of that loan, putting off the rest of the money because of a dispute with Kara's bank creditors.

Those creditors have objected to the financing plans, arguing that Bear Stearns would take control of major decisions for the builder. But Mandarino said that new loan provisions ameliorate those concerns.

The judge is expected to make a ruling today.

The East Brunswick-based company, one of the Shore area's biggest home builders, and nearly two dozen of its subsidiaries overseeing each of its developments filed for Chapter 11 bankruptcy in October after running out of money.

The company owes banks, subcontractors and home buyers about $227 million, according to its filing. And nearly 300 home buyers have signed contracts and made deposits for homes that haven't been built.

Friday, December 01, 2006 11:26:00 AM  
Anonymous Anonymous said...

Re: medical deductions. Maybe the HR wizard became too tied up managing all the other departments simultaneously and forgot to mail the check to the HMO.

Friday, December 01, 2006 12:32:00 PM  
Anonymous Anonymous said...

Anyone still drafting paychecks from KARA = simpleton.

You get what you deserve.

Friday, December 01, 2006 2:44:00 PM  
Anonymous Anonymous said...

SO WHAT HAPPENED IN COURT TODAY????

Friday, December 01, 2006 4:57:00 PM  
Anonymous Anonymous said...

Nothing on the Asbury Park Press other than the article posted above. I have no idea. Hey SCProf, you seem to have the inside track, any idea?

Friday, December 01, 2006 5:14:00 PM  
Anonymous Anonymous said...

Anyone canned by Kara and screwed for pay=simpleton. Any one still their is ahead of the former employees. Deal witht he fact that you didn't make the cut you loser jack off. Maybe if you had done your job you still would be getting paid everyweek like we are and getting you 3 weeks back pay next week. Oh thats right because you were an untalented piece of pond life you got whacked, are still sitting home, didn't get paid and are counting the weeks untill unemployment gets cut off.

Friday, December 01, 2006 5:18:00 PM  
Anonymous Anonymous said...

Kara was approved for the balance of the dip financing today. I guess the almighty prof out in cali is not the be all end all of predictions. Missed this one didn't you? What the heck even the best batters get out 7 out of 10 times. With SC's correct percentage he could get a job as a weatherman.

Friday, December 01, 2006 5:20:00 PM  
Anonymous Anonymous said...

No one's getting their 3 weeks back pay from October, if you believe Kara is going to just hand it over you're nuts. Never happening.

Friday, December 01, 2006 5:43:00 PM  
Anonymous SCProfessor said...

Anon 5:18 (aka Anon 5:20)

If you are the "run of the mill" valued employee that Kara's management chose to keep, I think that goes a long way to explaining why they are in such dismal shape. In the past I've suggested to my 18-year old rookie college students when they don't act as adults, they need to grow up. I'm going to suggest that you do the same.

This Bankruptcy has destroyed people. It is not funny or humorous. My intention has been, and remains, to provide insight to people reading this Blog who need some help in understanding what is going on.

The Bankruptcy Court sits as a court of equity. I don't expect you to understand that term. In essence what the judge does is look at the totality of the circumstances and makes a decision. Now this Judge is brand new to the bench. That in effect makes it difficult (or impossible) to forecast his decisions. I have not done so. If you will note, I said "if he were right on the fence on a decision to convert the case to Chapter 7 liquidation (or appoint a Chapter 11 Trustee) at tomorrow's hearing,..." I did not say that he would rule in favor or against continuing this case as a reorganization proceeding.

Please quit with postings that are unnecessary in terms of slandering former Kara employees. By being "former," I suggest they are on a better path than those of you who choose to remain on the payroll just because it gives you a paycheck.

SCProfessor

Friday, December 01, 2006 5:52:00 PM  
Anonymous Anonymous said...

Hey, I'm thrilled not to be working for Zudi anymore. He's a lousy businessman and a liar. I prefer working for someone who will actually pay me every week.

Re: back pay, the debtor is not permitted to favor any one creditor over another, it's all back pay for everyone or none for anyone. Regardless of what Zudi says. It's not for him to decide anymore.

Friday, December 01, 2006 5:54:00 PM  
Anonymous Anonymous said...

Okay so the DIP financing was approved. Now what? When will they finish my house?

Friday, December 01, 2006 6:08:00 PM  
Anonymous Anonymous said...

Thought I'd throw a little humor into this case that has its share of sadness......

http://tinyurl.com/ye58j9

Friday, December 01, 2006 6:15:00 PM  
Anonymous Anonymous said...

Here is confirmation:
http://www.app.com/apps/pbcs.dll/article?AID=/20061201/NEWS/61201040

Judge approves financing for Kara Homes
Posted by the Asbury Park Press on 12/1/06
BY DAVID P. WILLIS
BUSINESS WRITER

TRENTON — A bankruptcy court judge today approved a $2.6 million loan to Kara Homes, effectively keeping the home builder from going out of business.

"I am not prepared to throw out this debtor yet,'' said U.S. Bankruptcy Court Judge
Michael B. Kaplan.

Friday, December 01, 2006 6:20:00 PM  
Anonymous Anonymous said...

SC prof

While the previous, less than literate, current employee didn't quite go about it in the correct manner, I am also slightly offended by your posts. You truely don't have enough information to comment on these proceedings. It seems that you are quite well versed in the lawyer speak version of saying something, but really saying nothing at all. You are correct in stating that all of you posts have an out in them-a backdoor if you will. You never out and out state that what you are saying is going to happen, but it comes across to most readers as gospel. Practice what you preach. This is serious. It affects the lives of buyers, secured and unsecured creditors as well as those that worked there and still work there. Try to temper your opinions if you will. I know that is hard for anyone with a law backround-The profesion I like to call America's Nescessary Evil-to stifle their opinions, but hey try to be the kinder, gentler SC.

Friday, December 01, 2006 6:28:00 PM  
Anonymous Anonymous said...

So
What is the end result. Is Kara still a company? Are they able to build? Do they have subs that are working to get houses built Well if anyone has more then 1 life it is Zudi. I hope they get rid of all the dead weight like TG JK GB
RS and who ever is left that ruined the company. ZUDI should go back to being a hands on guy in the field like he did in the old days when Zudi had a heart and a dream and people that he cared about and people that cared about him and his dream of what Kara could of been. And was on its way till Robbie Hector, Tom,Phil M,
and all the dead weight remember
the people who were with you but would not let be part of the circle what ever happenen to kevin Brennen and Dugan short lived like all the others who Knew the real Deal. Good Luck To the people who still believe they will not get screwed in the long run sorry for run on sentences and no periods.
Remember what comes around goes around Zudi you should sell and move on and be a father to those kids and a husband and friend to your great wife I'm sure you have money to enjoy Life with your family sell the Rumson House I'm sure Bruce will buy it from you or someone with money.Its a one of a kind house never been built anywhere else. there are some up but the plans are wrong like all other plans
How did trade winds get built with no plans how many sets of as builts are there out there for a
Regal 3 4 5 how about a carlyle I believe only 1 is Zudis That was built for free since the vendors have no work or money.Thanks Zudi
I could have done this to myself but no you did it for me Merry Christmas if you have one. Hope you get Coal. you took from alot of people because you thought they were taking from you the only one takingfrom you is your family and friends that you employ were is John C.. well the end is near Bail before it is to to Late. may your world be filled with trash like you created..

Friday, December 01, 2006 6:49:00 PM  
Anonymous Anonymous said...

Wow that was one distorted twisted and twisted post. If there is anyone out there that can has a psychopath to English dictionary could you please translate what that was supposed to mean.

Friday, December 01, 2006 7:01:00 PM  
Anonymous Anonymous said...

I have an ebonics dictionary. I could translate that into ebonics and from ebonics to English.

Friday, December 01, 2006 7:24:00 PM  
Anonymous Anonymous said...

What
Does anyone understand what this peson is talking about. Another person who worked for Kara and does not no what they are talking about I Guess. So it looks like Kara has some time. Hope they do the right thing.

Friday, December 01, 2006 7:29:00 PM  
Anonymous Anonymous said...

YO SCProf, What's the bottom line for all us suckers(unsecured creditors)who got beat by Zuhdi? Will we ever see a dime out of this bum?

Friday, December 01, 2006 7:31:00 PM  
Anonymous Anonymous said...

must of been loaded

Friday, December 01, 2006 7:56:00 PM  
Anonymous Anonymous said...

Hey Anonymous 5:18

Really - you are a Simpleton or drank your lunch & dinner today.
It's really hard to decipher what you are even trying to say!

Friday, December 01, 2006 7:56:00 PM  
Anonymous Anonymous said...

I have to tell you SC Professor - You really had me down in the dumps. Judge Kaplan gave me a little hope today. Maybe nothing will pan out - but I still have hope. If anyone can pull this off - it's the Zudster.

Friday, December 01, 2006 8:05:00 PM  
Anonymous SCProfessor said...

Anon 7:31 asked, "SCProf, What's the bottom line for all us suckers(unsecured creditors)who got beat by Zuhdi? Will we ever see a dime out of this bum?"

At the risk of being critized for offering an opinion without all the information, I wouldn't suggest holding out false hopes. A couple of things are working against this Debtor. The first is the real estate market. I am of the opinion that we are seeing downturn that will be significantly worse than we saw in '79-'83 and '90-'94. If that's the case, everyone needs to recognize that the values of Estate assets are going down.

Additionally this Debtor's non-income producing expenses are going up. Watch as the professional fees eat up any remaining assets.

Friday, December 01, 2006 8:07:00 PM  
Anonymous Anonymous said...

Hey SC Professor - Don't let the critics get you down. I appreciate all of your input. But really - did you ever see "It's a Wonderful Life" - isn't there a slight possibility that this Judge knows what he is doing and everything could turn out ok in the end? Are you the eternal pessimist or just a realist? I know you aren't an optimist.

Friday, December 01, 2006 8:16:00 PM  
Anonymous Anonymous said...

Once again... When will the houses be finished?

Friday, December 01, 2006 8:16:00 PM  
Anonymous Anonymous said...

SC Prof - there are always a few bad apples..... I think your OPINIONS are excellent and give people a better understanding of what is going on - Keep it up

Friday, December 01, 2006 8:34:00 PM  
Anonymous Anonymous said...

The houses will be finished when Zudi gets his financing and finishes them. What - do you want a date?

Friday, December 01, 2006 8:35:00 PM  
Anonymous Anonymous said...

Does this mean Joe is coming back to work to screw more plans up? I don't think we need the cash drain.

Friday, December 01, 2006 8:50:00 PM  
Anonymous Anonymous said...

anonymous 8:35

Clearly you are not someone who is HOMELESS waiting for a house to be finished. I happen to be living in a hotel due to the INCOMPETENCE of management.

I deserve some kind of communication regarding the timeframe of the completion of my house. Or alternatively I should have an idea of what the next steps are. The DIP financing is only for operating expenses - not for construction. So I ask again... What is the plan to complete the homes?

Friday, December 01, 2006 9:20:00 PM  
Anonymous Anonymous said...

no time no frame

Friday, December 01, 2006 9:25:00 PM  
Anonymous disgruntled goat said...

Good lord, people, pull yourselves together! This isn't really that big of a deal, you know. It's a few million bucks to float the company through the next few months. It's far from finished yet, haven't any of you ever found yourself at the mercy of the court system? Don't lie, I worked with some of you and I know you relate. This was a hearing, not the final word so there's no need to get your drawers all bunched up over anything quite yet.

As much as I long to see Zippy & the Pinheads take a long walk on a short pier, it's pretty easy to see why the judge would allow this loan. Not only will it keep some people employed and maybe get a few more buyers into their homes, but it also allows some time to keep untangling the mess on someone else's dime. In the event the court decides to pull the plug, it'll be that much less of a mess to wade through for the appointed trustees. If Kara miraculously "turns the thing around", the judge looks like a genius so he really can't lose either way yet. So what's his incentive to rush it along?

SC Prof was speculating just like everyone else. I'm sure he doesn't care a whit about Zudi or Kara one way or the other. They're guesses based on a knowledge of the bankruptcy system, not predictions set in stone. I hardly think he presented anything as being the "gospel truth". Plus, he uses punctuation which makes his posts easy to read (hint, hint).

Why would I begrudge anyone still working at Kara? I'm happy they'll be able to keep their jobs through the holidays, in fact I hope they get every cent they can while they can. But seriously, don't even try to imply that the remaining Kara employees are all still there based solely on merit, because we all know that is just not true. There are absolutely some fine people still working there, no question. I wish them all the best. But fawning over Zudi is not a talent, although it appears to be a useful survival skill at Kara, based on noticing how many ass-kissers kept their respective jobs at the expense of other, useful employees. Deny it if you must but the evidence is all right there for anyone to see.

Friday, December 01, 2006 9:27:00 PM  
Anonymous Anonymous said...

Hey everyone,

I just want to say I feel very bad for everyone involved. I'm also waiting on a home. It's been real difficult dealing with all the stress concerning the future. Please guys, gals, employees, professionals, try to ease up a bit. Be patient and try to reach out in a new way so that everyone can feel better thru the holiday season. Please, be peaceful.

thanks

Friday, December 01, 2006 9:42:00 PM  
Anonymous SCProfessor said...

Anon 8:16 said, " But really - did you ever see "It's a Wonderful Life" - isn't there a slight possibility that this Judge knows what he is doing and everything could turn out ok in the end? Are you the eternal pessimist or just a realist? I know you aren't an optimist."

Great movie. I think it was one of James Stewart's best. But let's get down to practicalities starting with a bankruptcy filing that happened yesterday in New Jersey.

"Marcal Paper Mills, Inc., headquartered in Elmwood Park, NJ, has filed a voluntary petition under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey. The company, a manufacturer of tissue and towel products, says it has sufficient funds to continue its normal business operations, including on-going employee, supplier and customer obligations."

Do you notice the tone in that article. Marcal clearly had a plan when it entered its Chapter 11 reorganization. It isn't languishing. It is as though it hardly missed a beat. I give it a fairly good chance at achieving success.

So what is Kara's plan. The way I look at it, you will see a pattern of disposing homes that were probably in the pipeline to be sold and are completed (in terms of construction). First there were nine (9). Then another fifteen (15). But what about those where construction is required and not a dime of the $2.6M is budgeted for construction?

I'm sorry but I have difficulty believing "If anyone can pull this off - it's the Zudster."

Friday, December 01, 2006 10:47:00 PM  
Anonymous Anonymous said...

professor, give it a break. go to bed. you don't always have to have the last say.

Friday, December 01, 2006 11:01:00 PM  
Anonymous Anonymous said...

All Zudi's done in the last few months is hire a lawyer. A lawyer needs to do all his talking and a consultant needs to do his thinking and borrowing for him. So what use is he? Oh yeah, he brings his special brand of business genius and a pack of loyal flunkies to remind him of his greatness. Every successful business needs that. Ya think bear stearns will wait on their money in exchange for being allowed to loan them more later? Then Kara will be back to normal.

Friday, December 01, 2006 11:22:00 PM  
Anonymous SCProfessor said...

Anon 11:01 said, "professor, give it a break. go to bed. you don't always have to have the last say."

Remember, I live on the West Coast where the current time is 8:39p.m. You on the other hand live on the East Coast, which effectively means you can wake up at a reasonable time tomorrow morning and post while I'm still sleeping. Good night. :)

Friday, December 01, 2006 11:39:00 PM  
Anonymous Anonymous said...

"If anyone can pull this off - it's the Zudster."

Really? You mean the same Zudster who stiffed all those people for all that money? Yeah, he's a real f'n magician, that Zudster. He can turn a million bucks into nothing in the blink of an eye. Watch him as he performs his legendary "vanishing bonus and commission" trick. It's all an illusion, the check never leaves his hand.

The people who "brought you down" are Mr. Empty Pockets and his house-juggling sidekicks, not some bloggers. God only knows why anyone would come to the defense of those crooked, lying sacks of crap. I'm sure they appreciate it, though.

Saturday, December 02, 2006 2:07:00 AM  
Anonymous Anonymous said...

Zudi is a bum, he needs to have his hand held just to mooch more money. Listen to his phony sincerity about the buyers, same ones he let twist in the wind all year long. The wisest move anyone could make would be to kick his useless lying ass to the curb before he & his slimy friends loot even more.

Saturday, December 02, 2006 1:53:00 PM  
Anonymous Anonymous said...

Sure am glad to know Zudi is "pleased" that he was finally able to convince someone to loan him more money. Now he can keep playing businessman for a while longer. What a fraud of a human being he really is.

Saturday, December 02, 2006 2:01:00 PM  
Anonymous Anonymous said...

Does anyone really think this 2 mill is going to do anything!!! How many times was Zudi lent money by a bank and it just seemed to disapear into the Kara machine.

What Kara needs to do is get people in their homes. That is all the company can do. Do you really think anyone will buy another Kara home, after all of the publicity. Kara's brand is now the equivalent of the 1980's weight loss pill called "Aydes" remember those things.

I do not care how many color ads Zudi tries to put in the paper people do not forget. (In addition the APP will not let anyone forget)

So Kara will hopefully get some people in thier homes the employees, contractors are screwed there is no arguing that point.

Zudi is a saleman plain and simple. My guess is he will open Kara Used Auto's in Rumson. He can than hire Tom J and Tracy R to sell his cars at a discount. While John K can go about repoing cars for the bank. (while screwing Tracy R in the back of a VW Bug)

I have no idea what George B will do, maybe he can go back to the moutains and chop down some trees. Or he can start a commune for stuttererss who can't seem to find a Hair Cuttery.

We will have to see!!!!!
Any other observations???

Saturday, December 02, 2006 3:34:00 PM  
Anonymous Anonymous said...

Question --- if by some miracle they get funding to finish incomplete houses and then convince subs to come and do the work --- can the subs lien the property, or because it's tied up in bankruptcy you won't be able to put a mechanic's lien in place?

Saturday, December 02, 2006 4:04:00 PM  
Anonymous Anonymous said...

Will they use any of this money to finish the clubhouse? I'm really in the mood for some bocci ball and a game of tennis...duh!

Saturday, December 02, 2006 7:32:00 PM  
Anonymous Anonymous said...

"Does anyone really think this 2 mill is going to do anything!!! "

Yeah, its going to allow Zuhdi to get the wife some Christmas presents. As far as you folks who got the ax are concerned, well it kind of sucks to be you.

Saturday, December 02, 2006 7:53:00 PM  
Anonymous Anonymous said...

Zudi is a worthless scumbag, other people run his company & do his thinking now.

Saturday, December 02, 2006 7:58:00 PM  
Anonymous Anonymous said...

Rumor has it 20-30 more heads roll by Friday.....this dough has to last them, people.

Saturday, December 02, 2006 8:05:00 PM  
Anonymous Anonymous said...

Anon 7:53:21 PM - Yeah, its going to allow Zuhdi to get the wife some Christmas presents. As far as you folks who got the ax are concerned, well it kind of sucks to be you.

No my dilusion friend, it sucks to be you if you are still sniffing around Zudi, kissing his butt for your next paycheck. Those that were let go are way ahead of you!! They are looking for and finding new jobs with real companies that have real management. By the time the door slams on Kara Homes for good it will be too late for you to find a descent job! So idiot, I say it sucks to be you !

Saturday, December 02, 2006 8:14:00 PM  
Anonymous Anonymous said...

Who do you think's getting the
Christmas present?

Saturday, December 02, 2006 8:17:00 PM  
Anonymous Anonymous said...

Hey SC Prof - Please ignore the ignorant posters who didn't have a clue when they were sitting on butts collecting a paycheck (per Zudi's mom) and continue following this case and offering your opinion and insight. Your posts are informative and entertaining. If you ever make a trip to NJ, I bet a lot of people would love to meet you and buy you a drink! Although I doubt Zudi would be one of them.........

Saturday, December 02, 2006 8:20:00 PM  
Anonymous Anonymous said...

"So idiot, I say it sucks to be you!"

I WAS BEING FASCICIOUS! I got whacked too and beat out of 3 weeks pay plus bonus money. BUT, I did get a job making better money. I didn't mean to piss you off.

Saturday, December 02, 2006 8:25:00 PM  
Anonymous Anonymous said...

Facetious. I misspelled. Sorry

Saturday, December 02, 2006 8:29:00 PM  
Anonymous Anonymous said...

Any idea on whose getting canned next week?

Saturday, December 02, 2006 8:37:00 PM  
Anonymous Anonymous said...

If you are an unsecured priority creditor (back wages), make sure you send in your Proof Of Claim form before the deadline passes. All unsecured priority claims are legally given the same consideration, if you feel there is an issue regarding this, notify the court at:
U.S. Bankruptcy Court
Clarkson S. Fisher US Courthouse
402 East State Street
Trenton, NJ 08608

Saturday, December 02, 2006 8:40:00 PM  
Anonymous Anonymous said...

Me, I couldn't care less whether Kara Homes Inc. the company lives or dies. Irrelevant to me. I'm gone now & I've moved on. Good luck to whoever's still there.

Zudi is a different matter altogether. I hold him solely responsible for cheating me and everyone else. If he gets away with a scam of this size, there is no justice in this world at all.

Saturday, December 02, 2006 11:18:00 PM  
Anonymous Anonymous said...

Anonymous said...
If you are an unsecured priority creditor (back wages), make sure you send in your Proof Of Claim form before the deadline passes. All unsecured priority claims are legally given the same consideration, if you feel there is an issue regarding this, notify the court at:
U.S. Bankruptcy Court
Clarkson S. Fisher US Courthouse
402 East State Street
Trenton, NJ 08608

The Clerk's office can not give legal advice. Seek the advice of an attorney.

Sunday, December 03, 2006 12:00:00 AM  
Anonymous Anonymous said...

Someone mentioned "It's A Wonderful Life" somewhere on this thread and it really gave me pause to think. Maybe, just maybe, the Z Man will wake up on Monday morning and say to himself, "By golly, I sure have made a mess of things. But ya know, I'm gonna get out there, roll up my sleeves, and set about making all my wrongs right again. I'm gonna pay those people back every cent and when I'm back bigger than ever, I'll bring every one of 'em back to share in my great fortune!". Then cut ahead to a few months later, and as everyone hangs their heads thinking there's no hope, Zud struts through the door and shouts, "Great news, everyone, I've found us an investor who'll loan us one BILLION dollars, right now! Look, I've brought a few old friends with me!" and in walks an army of smiling, reemployed people popping the corks on their champagne bottles. Then Rodney Dangerfield appears out of nowhere and says, "Hey everybody, we're all gonna get laid!" and Journey's "Any Way You Want It" begins to play. Totally awesome topless horseplay then ensues as we fade out to the closing credits and the hilarious outtakes.

Sunday, December 03, 2006 12:26:00 AM  
Anonymous Anonymous said...

Hey anon @ Saturday, December 02, 2006 3:34:11 PM

Your post is hilarious. Being a former employee I can relate to your predicition of the Kara Used Cars!! You described George B perfectly. He stutters so badly you just want him to not say anything.

John K repoing cars is a great line!!!! Him doing is not a fantasy but a fact a sick as that is (seeing she is one overweight ugly/miserable person)

What ever happened to Hecktors kid Kevin?? Haven't heard anything about him in a while

Sunday, December 03, 2006 12:59:00 AM  
Anonymous SCProfessor said...

In looking at the Court’s decision permitting the continued funding of interim financing, I find some of the comments contained in the article available at http://tinyurl.com/ynf33b , interesting. I’ve pulled a few quotes and then added my view (expecting criticism), of what I think will happen. Time will tell whether or not I’m correct or Zudi will rise from the ashes like the Phoenix.

Banker’s View:

Dean Waldt, who represents National City Bank, said the interim financing was only delaying the inevitable demise of Kara. "This credit facility is a hibernation chamber that puts the debtor into a financial coma until the month of March."

Zudi’s View:

He said after yesterday's ruling that the "No. 1 priority" is to get buyers into their homes.
"Kara Homes is here to stay," Karagjozi said. "One way or another, I will find a way."

SCProfessor’s View:

Kara Homes will not survive. The interim financing will enable the closing of a handful of additional homes that will not surprisingly produce about $3,000,000 in the next eleven weeks. That amount will be just enough to cover Bear Stearns’ operational funding for the 13 weeks plus interest at 15% per annum. Traxi and Bear Stearns will, as a result of their investigation discover that there is no equity in the remaining assets of the Debtor estate sufficient to justify continuing on with this reorganization effort. The case will be converted over to Chapter 7 and the U. S. Trustee will appoint a Chapter 7 trustee.

The Chapter 7 trustee will, based upon a quick analysis, concur with the analysis of Traxi and Bear Stearns, and abandon all of the real property allowing the construction lenders and mechanics lien claimants to foreclose. The assets consisting of proceeds received on the sales of homes will be distributed first to secured creditors (including Bear Stearns). Any remaining proceeds will be utilized first to pay for Chapter 7 administrative claims, second for Chapter 11 administrative claims, and then assuming there are additional funds available, to pre-petition priority claims (wages, etc.), and finally to general unsecured creditors. My guess is that there won’t be enough to fund Chapter 11 administrative claims and they will be paid out on a prorated basis, with pre-petition priority and non-priority claims receiving nothing.

I expect of course, in recognition of Zudi's musical talents, that one of you wil adapt the words he spoke yesterday to music:
"Kara Homes is here to stay."
"One way or another, I'll find a way."

Sunday, December 03, 2006 2:16:00 AM  
Anonymous Anonymous said...

Maybe his latest utterances could be set to the music of Blondie's "One Way Or Another". In particular the line "i'll give you the slip" rings a bell.

Sunday, December 03, 2006 9:13:00 AM  
Anonymous Anonymous said...

Zudi on a smaller scale:
http://tinyurl.com/y64l4k

Sunday, December 03, 2006 10:40:00 AM  
Anonymous Anonymous said...

Maybe when the market returns most of the surviving trades will have learned something out of all this. I suggest getting a better contract together and holding to it even if it hurts initially. Stick to business And know the law! I know from John C that the companies that played hardball with Kara got paid. Maybe not right away, and they may never have gotten another job from Zuhdi but they didn't get beat out of their millions either (Sambol comes to mind). So what's the loss if you don't get another job from someone who isn't going to take care of you anyway? You work - you get paid! Simple concept, but all too easy to get sucked into someone else's whirlwind of BS, promises and lies. If all the trades had the same tough approach with Zuhdi at the beginning maybe Kara Cares would not have taken advantage of the trades so easily and gotten so filthy rich off of them. Like I heard Patrick G say - New Jersey is a great place. You can make lots of money!

Sunday, December 03, 2006 11:32:00 AM  
Anonymous Anonymous said...

--I know from John C that the companies that played hardball with Kara got paid. Maybe not right away, and they may never have gotten another job from Zuhdi but they didn't get beat out of their millions either (Sambol comes to mind). --
I meant to say that Sambol comes to mind as one that played hardball with Z. My bad.

Sunday, December 03, 2006 11:35:00 AM  
Anonymous SCProfessor said...

From the perspective of sub-contractors and material suppliers getting paid, I think it is imperative to know State Law backward and forward when it comes to preserving mechanics' liens. This focus should include "stop notice" rights if they exist, where you can effectively force construction lenders to segregate a portion of the construction loan proceeds for payment.

While I'm on this subject, construction lenders need to get smarter, making sure that in conjunction with fund disbursements that these potential claimants get paid. One of the best systems I've ever seen utilized a dual signature check system where the builder was required to bring in checks that they had filled out, made payable to sub-contractors and suppliers along with invoices. The lender would compare the invoices with line items on the cost breakdown and actually go out and inspect the project to make sure the work had been completed, before countersigning the check and sending it to the payee. Each check on its back contained a restrictive endorsement, indicating that negotiation of the check released mechanics' lien rights to the extent of payment.

This sort of building fund control approach does a lot to eliminate the potential of problems like we see in this case. Unfortunately this approach is the exception and not the rule. The rule is unfortunately following a draw system where construction funds are disbursed to the builder at various stages of completion (usually based on a percentage of completion).

Sunday, December 03, 2006 12:15:00 PM  
Anonymous Anonymous said...

Zudi cares about Zudi & nothing else. Never has, never will. He's a shyster and a brilliant bamboozler, with any word he says, you can guarantee the exact opposite is true. How can you tell Zudi is lying? Easily, his mouth will be moving.

The above posts ring very true. It was not a secret that Kara was having trouble paying bills, it had been going on for a long, long time before they finally filed. If a business isn't paying you now for completed work, what good are promises of more opportunities to work for them in the future? Lesson well learned-get that money in your hand before committing to anything. Doesn't make any of it "right", but as sad as it is, it's completely true.

Sadly, the same applies to buyers. You have to do your homework, knock on doors, look around, research things. A salesperson isn't going to tell you about the overall health of the business, they'll tell you whatever it takes to get that check. Again, doesn't make any of it "right", but it is a sad reality.

The truth is, a businessman like Zudi is after money, first and foremost. People like him are looking out for themselves, not you or your interests. It's up to the individual to protect their own interests, counting on the "word" of someone with a different agenda will get you nothing in the end. Handshakes and promises don't feed the kids, remember that the next time some charismatic bullshit artist spins you a line of crap.

Sunday, December 03, 2006 12:55:00 PM  
Anonymous Anonymous said...

Kara might have a slim chance but only if they manage to ditch Zuder, his dimwitted sidekicks and that awful human resources woman too. There's you're stumbling blocks right there.

Sunday, December 03, 2006 2:53:00 PM  
Anonymous Anonymous said...

Rumor has it that Roberta Schultz may be getting axed soon. Keep you fingers crossed.

Sunday, December 03, 2006 4:00:00 PM  
Anonymous Anonymous said...

I hear G Brandt is doing everything in his power to get rid of Robbie

Sunday, December 03, 2006 5:52:00 PM  
Anonymous Anonymous said...

George has been doing everything in his power to get rid of Schultz since she came on the scene. Problem is, George doesn't have that much power. He has been hurt ever since Zbull made Hector COO.

Too all that think Zbull will pay subcontractors, forget it. He will suck you in again and then play the "invoices are lost" game all over again. If you work for Kara you better work T&M with a bank backing payment.

Sunday, December 03, 2006 6:03:00 PM  
Anonymous Anonymous said...

OK folks, what happens next? All the remaining employees show up on Monday and do what? They are getting paid but to do what. Sales can't sell, construction can't build and purchasing still can't purchase. I guess Robbie, JK and Hektor (oops stinky is gone) can do what they always did which was nothing, so their status quo. When does something break? If any of the experts on this site have any ideas on this I would love to hear them.
It seems that all the court is doing is giving more time to a ship that is on the way down and has no plan on how to fix the hole or even start baling out. It would seem that someone, the courts, Bear Stearns or Traxi, would have removed the dead wood by now.
The problem is the Z man, Schultzie, Kelly and Jablonski will still be there on Monday. The sames ticks are still sucking the old Kara dog dry. Like any good parasite they are trying to get the last ounce of blood out of their host.
Not that you can knock them for hanging on. Where else do they have to go? It's not like the world is beating down their doors to go work for someone else.

Sunday, December 03, 2006 7:53:00 PM  
Anonymous Anonymous said...

TJ's continued survival is a real mystery. What did he actually do all day to merit being the highest paid employee? His assistant did all his real work. The salespeople did all the actual selling. The legal dept. handled the closings. Someone else already there could easily do whatever he supposedly does at half the price. Tell me, am I lying??

Sunday, December 03, 2006 9:16:00 PM  
Anonymous Anonymous said...

As far as TJ goes, Zudi thinks if TJ goes he is done. TJ has spent so much time snowing Zudi to make him seem important that he is now indespensible (from Zudi's point of view)

My opinion is that the judge did not want to put this debtor out of business so close to the holidays. Can you think of the political ramifications if 400+ NJ residents where told Happy Holidays your homes are now gone what that would do to Kapplans future political asperations. These are not cheap homes!!! These are taxpayers with some clout. Kapplans knows that taking them Ch7 now really justs hurts everyone at a bad time. Wait until the 2.6 mill is gone. We will see that Kara is still in the same place they are now and Kapplan will be bullet proof when he takes them CH 7 after the New Year.

My opinion only, what does the group thing???

Monday, December 04, 2006 8:32:00 AM  
Anonymous SCProfessor said...

Bankruptcy Judge positions last 15 years. He was appointed only one month ago. I'd find it difficult if his decision was based on a Christmas factor.

I think Disgruntled Goat was probably correct in figuring what we really have here is an opportunity to clean up the mess. That is, don't loose the opportunity to sell a few more homes where they are done and all that is needed is a closing. It won't take all that much time to run out of this completed home inventory.

Just because the loan is in place, don't expect construction lenders to sit by while their collateral continues to slide in value (due to the downturn in market conditions and weather damage). I expect them to continue swinging with motions for relief from the Section 362 automatic stay to congest the Court's calendar. They will do this in part to convince the Judge that the values just are not there and this Debtor cannot be reorganized.

Oh and as to Zudi, I expect him to have to file his own bankruptcy (likely a Chapter 11) fairly soon. Those bonding companies are going to start feeling the pain as claimants start pushing for them to recognize their responsibilities under the performance bonds. No doubt Zudi has personally guaranteed them so I expect the bonding companies to start lawsuits against him.

By the way, does anyone know the County where Zudi lives? It may be worth checking to see if they have an online database containing a directory of lawsuits to see if the bonding companies have already started their litigation.

Oh and for those of you who have not read enough about the misery Kara Homes has caused home buyers, the following forum might interest you:
http://www.ibsteam.net/wsnlinks/thread/657

Monday, December 04, 2006 11:32:00 AM  
Anonymous Anonymous said...

re: SC, Rumson is in Monmouth county.

Monday, December 04, 2006 11:59:00 AM  
Anonymous Anonymous said...

Zudi already declared personal bankruptcy several weeks ago...

Monday, December 04, 2006 12:40:00 PM  
Anonymous SCProfessor said...

Anon 12:40 said, "Zudi already declared personal bankruptcy several weeks ago..."

Do you have a case number? Last thing I recall reading was that North Fork Bank had filed a lawsuit against him but it wasn't anticipated that he would be filing as of that time.

Monday, December 04, 2006 12:53:00 PM  
Anonymous Anonymous said...

Big Z's gone Chap. 7, eh? Now he and I have something else in common besides not knowing how to iron clothes :)

Monday, December 04, 2006 2:01:00 PM  
Anonymous Anonymous said...

SC Prof- Thanks for your insights. As a Kara customer, I appreciate your frank opinion.

Unfortunately it appears I won't get my deposit back, but I still think someone should be held accountable. It's obvious Kara fruaded many people, i.e. buyers, employees, suppliers, etc. Any way to petition criminal action against Zudi and senior managers? Can I contact the my State AG?

Thanks

Monday, December 04, 2006 2:09:00 PM  
Anonymous Anonymous said...

You can file a charge of grand larceny and theft with the East Brunswick, Rumson or the township police that your home is being built in.

I do not know if anyone has done this or not.

You should try and let the group know if anything happens. From there every homeowner who lost a deposit can file formal criminal charges.

Make sure you have a copy of your contract and a copy of the cashed check.

The people you are going to want to file criminal charges against are:

Zudi Karagjozi
John Kelly
George Brandy
Hector Peshkopia
Tom Jablonski

I do not think the bankrupsy can stop criminal charges.

Monday, December 04, 2006 2:42:00 PM  
Anonymous Anonymous said...

RE: anon 2:09-you need to contact a capable attorney, now.

Monday, December 04, 2006 2:45:00 PM  
Anonymous Anonymous said...

anon 2:45- First off, I have a bankruptcy attorney representing my interests in this case. Notwithstanding, I want pursue criminal charges against Kara. It’s a separate action and doesn’t require a lawyer. Further, I specifically posed the question to the professor. So unless you're credentialed in this area, I’m really not interested in your input.

Monday, December 04, 2006 2:58:00 PM  
Anonymous Anonymous said...

Did anyone ever hear of buyer beware Maybe you should have spoken to some of the other homebuyers in each community. I do not know of anyone who has had a good experience with Kara maybe some of there staff has been helpful. I know I had some happy homeowners Kara sucked to work for it was a job and Zudi had everyone believing his "BULLSHIT" I Know working for Kara sucked if you counted on a bonous check it was always late we never got them on the 15th but we closed houses for Zudi and the big cheeses they got theres and are still getting theres thats why you got beat you did not talk to anyone around you show me a happy Kara Homeowner or employee.

Monday, December 04, 2006 3:46:00 PM  
Anonymous Anonymous said...

There were happy homeowners and unhappy homeowners prior to when this went really bad. That is how it is with all builders. This is not the customer should have know situation. Towards the end my sales rep in Monroe out and out lied when confronted about the financial condition of Kara. That is fraud and when it is all said and done I will personally make sure everyone's ass is sitting in a jail cell.

Monday, December 04, 2006 4:13:00 PM  
Anonymous Anonymous said...

Yea, give me a break. This has nothing to do with buyer beware. The company had been promoting its financial strength in the weeks leading up to the bankruptcy. Anyone happen to catch the news release in late August touting record sales??? In fact, if someone has a copy of the release, please post it to the site.

This is case of blatant fraud. If we get beat, it's because we were lied to by a bunch of crooks.

Monday, December 04, 2006 4:24:00 PM  
Anonymous Anonymous said...

Is Perotti still working?

Monday, December 04, 2006 4:46:00 PM  
Anonymous Anonymous said...

Re: anon 4:46 - no

Re: anon 2:58 - I want to see them go down just as much as you do. I, however, was not specifically defrauded in the legal sense, I just got screwed. If you were defrauded, please for the love of God go for it, if I had a copy of that press release I'd fax it to you right now. If I were you I would drop a few emails to the authorities and see what they think.

Monday, December 04, 2006 6:23:00 PM  
Anonymous Anonymous said...

Perotti=gone

Can't charge the sales people with fraud if they were being lied to, like the rest of the company. If Z, TJ and the rest of the band of gypsy thieves was swearing on their sainted mothers eyes, that all would be well, how can the employees be blamed for following their leads. If Patton told his troops something and they didn't believe it they could be shot. If your boss says it's so and you don't have documented proof that it is a lie, how can an employee be held responsible for their actions, as a result of what they were told?
One more thing-what's the over/under on days until the grim reaper/schultzie/the HR director with more power than an other minor department head in the history of business-get whacked. My call is 3 days.

Monday, December 04, 2006 6:41:00 PM  
Anonymous Anonymous said...

For those contributors who have little or no command of the English language. Please take note...


there: in or at that place [stand over there] -- often used interjectionally


their: of or relating to them or themselves especially as possessors, agents, or objects of an action [their furniture] [their verses] [their being seen]

Alla

Monday, December 04, 2006 6:49:00 PM  
Anonymous Anonymous said...

Let's not forget "they're" which, as we know, is a contraction for "they are".

Monday, December 04, 2006 6:51:00 PM  
Anonymous Anonymous said...

sorry for the oversight

Monday, December 04, 2006 6:54:00 PM  
Anonymous SCProfessor said...

First of all I’d encourage you to do what ever you feel will “right” your “wrong.” Here on the Left Coast, Kara by taking control of the deposits from a subdivision (and by definition that is 5 or more parcels [contiguous or non-contiguous]), would have violated my State’s laws and would be subject to criminal sanctions irrespective of criminal intent. We call this a “per se” violation of law and criminal intent is presumed. Certainly makes it a lot easier for a prosecutor to proceed forward. Unfortunately, New Jersey doesn’t have, based upon my limited Internet search, a similar law. If nothing else happens as a result of what Kara’s done, perhaps you all can move your legislature into passing similar legislation.

So, for a prosecutor to be interested in moving forward against those potentially culpable here, they will want to see evidence of what is called the “mens rea.” (see http://en.wikipedia.org/wiki/Mens_rea ). That is the requisite criminal intent. The fact that this is a “high profile” case in your area is a plus in terms of getting prosecutor interest. There are however some clear negatives. These cases are challenging because they are complicated. The prosecutor is going to need to see clear evidence that Zudi (and potentially others) knew, or should have known, that Kara Homes would not be able to perform under the terms of your contract because of its financial condition, and took your money with the intent of never performing.

How long before the Bankruptcy filing was your deposit taken? The further out, the less likely a prosecutor will be interested in proceeding. The action of the prosecutor in not going forward is what is called prosecutorial discretion. They often choose not to go forward simply because they like to keep their batting average high. Just ask the prosecutor in Boulder, Colorado about that (lessons learned in the JonBenet Ramsey case).

I know I’ve said this before, but I sense there might be other avenues of recovery. You need to look at your contract. Was there a bonding company? I know some buyers have indicated their contract indicates the existence of a bond to protect the deposit against loss. Here even if there wasn’t one, but your contract says there was, you could make an argument of “fraud in the inducement” and have a better basis for the prosecutor to go forward. Who did you make your check payable to? If it was a lawyer, there may be a potential of recovery against them. If you want to answer my questions privately, email the answers to me at smiller1961ca@yahoo.com.

Monday, December 04, 2006 7:52:00 PM  
Anonymous Anonymous said...

Deposits were taken several days (less than a week) before the bankruptcy filing...

Monday, December 04, 2006 8:09:00 PM  
Anonymous Anonymous said...

Kara issued a company news release touting record sales for July and August 2006. Does anyone have a copy of this release?

Monday, December 04, 2006 9:26:00 PM  
Anonymous Anonymous said...

They issued it in July I believe & it touted record profits for the first two quarters. Wish I had a copy, it isn't among the news releases on their webpage either.

Tuesday, December 05, 2006 12:15:00 AM  
Anonymous Anonymous said...

scprofessor,
Please keep your posts to one paragraph. I usually skip what you say because you are so long winded. Also, why so much interest if you live on the "left" coast? Most people in New Jersey don't even know about Kara Homes. I am sure many builders on the west coast are going through the same thing so why don't you bother them. My guess is you actually do live in NJ and used to work at Kara.

Tuesday, December 05, 2006 12:31:00 AM  
Anonymous Anonymous said...

Anon 12:31

Does it really matter where SCProfessor lives? I guess it would if he were in Albania like poor Etvela (see http://tinyurl.com/yap677 ). I wonder how Zudi is going to like living there? If the length of SCProfessor's postings exceeds your attention span, then I suggest the problem is yours, not his. You are certainly free not to read his postings by simply scrolling by.

Something tells me that if SCProfessor did live here in NJ and use to work at Kara, he would be smart enough not to provide clues. But then again, maybe SCProfessor is actually an Anonymous poster at times....

Go figure....

Tuesday, December 05, 2006 1:25:00 AM  
Anonymous Anonymous said...

WHERE IS KEVIN DEGAN
WHY ARE NO HOUSES BEING BUILT NO MONEY THATS RIGHT THE AMERICAN WAY WORK FOR FREE

Tuesday, December 05, 2006 6:50:00 AM  
Anonymous Anonymous said...

I have a copy of the "Kara Homes Exceeds Projections" article. The Star Ledge July 16, 2006. I don't have a scanner to scan it to the blog.

Tuesday, December 05, 2006 8:04:00 AM  
Anonymous Anonymous said...

Who is Kevin Deegan?
There was a Brian Deegan and a Kevin Brennan (they were both crooks, liers and part of the reason Kara collapsed)

Tuesday, December 05, 2006 8:37:00 AM  
Anonymous Anonymous said...

Thanks for info re the Ledger article.

Tuesday, December 05, 2006 8:38:00 AM  
Anonymous Anonymous said...

Anon 8:04- just checked the Star-Ledger and there's no record of the story. Are you sure it ran there? I don't suppose you'd be willing to fax me a copy?

Tuesday, December 05, 2006 9:58:00 AM  
Anonymous Anonymous said...

Actually my copy of the Exceeds projections article says "reprinted from The Star Ledger". It was given to us, by Kara Homes, when the payments starting slowing down and we questioned it. Sure, I'll fax it to you.

Tuesday, December 05, 2006 10:50:00 AM  
Anonymous Anonymous said...

Anon 10:50 -many thanks. Like you, I suspect the news release was intended to "hype" the company's financial standing in an effort to string along buyers, vendors, etc. If it's not too much trouble, please fax the article to 646-935-4486.

Tuesday, December 05, 2006 11:24:00 AM  
Anonymous Anonymous said...

EN KARA

Tuesday, December 05, 2006 11:37:00 AM  
Anonymous Anonymous said...

That 2006 press release was a DIRECT response to the rumors that were dogging Kara all year. NO question.

Tuesday, December 05, 2006 12:25:00 PM  
Anonymous Anonymous said...

Here are a few that I found that talk about the company:

http://www.builderonline.com/industry-news.asp?channelID=59&ArticleType=1&ArticleID=1000026923

http://www.redcoatpublishing.com/spotlights/sl_04_04_kara.asp

Tuesday, December 05, 2006 2:15:00 PM  
Anonymous Anonymous said...

Got the fax. Many thanks again for sending.

Tuesday, December 05, 2006 3:52:00 PM  
Anonymous Anonymous said...

The first article I read when it came out and it still makes me shake my head in disbelief. Always the loser. The last article I read with interest having not seen it before, thanks, same reaction.

Next time you read an article in the APP or the Star about how much of a genious someone thinks he is, think about what you now know about Z and how he got there - and the aftermath. Maybe someone will get wise and kick him to the curb before he does too much damage.

Moderator, if a blogger has relevent scanned info in PDF or JPG format pertaining to the Kara Homes debacle how do they get it posted? I'm a regular and wrote items such as "The importance of having a good contract" up above as well as the Rumson house foundation story in previous a thread as well as many other interesting comments. I have some zinger news clippings from old APP, Staten Island News, I think it is, and other sources that readers would want to see. Regards to all.

Tuesday, December 05, 2006 3:58:00 PM  
Anonymous Anonymous said...

Anon 3:52

Your welcome. Hope you enjoyed it.
They really did exceed all expectations this year, didn't they?

Tuesday, December 05, 2006 7:37:00 PM  
Blogger Little Silvered said...

To Anon.
Tuesday, December 05, 2006 3:58:43 PM

I'll post a PDF if you want. Send it to silvered.little@gmail.com.

Tuesday, December 05, 2006 8:08:00 PM  
Anonymous disgruntled goat said...

RE: anon 7:37- They sure exceeded mine and remember, by Zud's math everything doubles every year, so my expectations were 2 to the 3rd power higher this year than they were in 2003. So they really outdid themselves in 06 for sure.

Tuesday, December 05, 2006 9:56:00 PM  
Anonymous Anonymous said...

THIS IS TO FUNNY? HE IS DONE?ANY SUB THAT WORKS FOR HIM NOW IS CRAZY.ZUDI ROBED SO MANY PEOPLE. SOMEONE WILL PROBALY TAKE CARE OF HIM.HE OWES SOME SHADY PEOPLE SOME BIG MONEY PEOPLE THAT WILL PICK HIS KIDS UP OFF THE STREETS.

Tuesday, December 05, 2006 9:59:00 PM  
Anonymous Anonymous said...

He may not get out because he made the mistake of front loading, making personal guarantees on, then defaulting on his own worthless carcass with the dark suited bad boys from Bayonne for fronting him the seed money to begin his land bank in '00. Z's an idiot. He knew once he went to bed with them he would ever get out but all he saw was dollar signs. What a gambler.

Tuesday, December 05, 2006 10:30:00 PM  
Anonymous SCProfessor said...

The article below appeared in today's Cincinnati Enquirer. The headline, IMHO, cuts to the chase. I suspect a situation such as this, where Zudi and other Kara upper management continue to receive their paychecks, helps you to understand why I think the bankruptcy system is broken.

The good news in all of this is an ego centered Zudi has no choice but to live in a self imposed prison. He can't walk into stores or restaurants around town without having to fear the possibility of running into someone whose life he has ruined. Like Anon 1:25 said when talking about Albania, "I wonder how Zudi is going to like living there?" Given where the recent Blog postings have been centered, you've got to wonder whether there are extradition issues with Albania and if Zudi views a one way ticket there as his "get out of jail free" card.



http://tinyurl.com/yj6ffw

Subcontractors might never get money owed

BY DAVID P. WILLIS

Stephen Clark is blunt when he talks about how the bankruptcy of Kara Homes Inc., his largest customer, has shaken his life.

"We will not have a Christmas this year," Clark, 65, the owner of Atlantic Fence Enterprise LLC in Little Egg Harbor, N.J., said of his family's finances. "It is that serious."

Clark's company, which has installed fences at Kara housing projects, is among the so-called unsecured creditors, including subcontractors, employees and prospective homeowners, who are owed a total of about $50 million by Kara.

The company owes banks, subcontractors and home buyers about $227 million, according to its filing. And almost 300 home buyers have signed contracts and made deposits for homes that haven't been built.

You only need look at the bankruptcy filing to see the different types of companies affected, from businesses that supplied portable toilets at work sites to electricians, plumbers and construction companies.

Some bigger companies, especially those with financial reserves, might have an easier time absorbing the hit. But others, including smaller businesses, face layoffs and hard times. Some might not survive.

Wednesday, December 06, 2006 10:47:00 AM  
Anonymous Anonymous said...

Thanks SCProf for your info. Keep posting as it helps us creditors understand. I’m attempting to learn about bankruptcies by doing a little internet research. One case I found sort of puts into view what you are saying about the system being screwed up. It’s about a bottled water company in Cali that went broke and is in a reorganazation. I liked what the judge said that was quoted in the newspaper. He said "We have an unmitigated mess here," the judge said. "We've got a dead animal here, and everybody's just trying to figure out how to get the most money out of it." Oh and those who are interested can read the article. http://www.sanluisobispo.com/mld/sanluisobispo/business/16171519.htm

I’m thinking the Kara bear is pretty well dead. Just like with that water company. The lawyers are all fighting over the scraps. Maybe we can get some satisfaction like what’s going on in with the water company higher ups who are being investigated for fraud by the Feds.

Wednesday, December 06, 2006 11:51:00 AM  
Anonymous Anonymous said...

get the Feds to see who victor Zudi is and why he is in trouble no telling what the feds turn up rat them out alla

Wednesday, December 06, 2006 12:18:00 PM  
Anonymous Anonymous said...

Every time a scumbag like Zudi Karagjozi gets "another chance" it send the clear message that no matter how you screw up, no matter how much money you lose or how many people get hurt, it's all OK. You can hide behind lawyers, get some corporate diaper-changers to clean up your mess and give you more money to waste and none of it matters. Irresponsible showboaters like Zudi are ruining this country for everyone. We have zero future if crooks like him are permitted to steal from the working class as if it never happened.

Wednesday, December 06, 2006 12:33:00 PM  
Anonymous Anonymous said...

FYI

Kara Homes owner sued over bonds designed to protect home-buyer deposits
Posted by the Asbury Park Press on 12/6/06
BY MICHAEL L. DIAMOND

A New York-based insurance company is suing Zuhdi Karagjozi, the owner of embattled Kara Homes Inc., for $4 million because it said he hasn't made good on a personal guarantee he made to the company to buy two bonds.

Westchester Fire Insurance Co. said Karagjozi made the personal guarantee in 2004 when his company bought the bonds to protect home buyers' deposits at The Landings at Manahawkin, a housing development in Stafford.

As Kara's financial problems deepened this year, the builder didn't complete some of the homes in the development as scheduled. Three home buyers at The Landings have sought their deposits back and have filed claims with Westchester totaling $128,576, according to the lawsuit.

In the lawsuit, filed in U.S. District Court in New York, Westchester said Karagjozi has "failed and refused'' to take steps to reimburse the company.

It marks the third lawsuit filed against Karagjozi, a Rumson resident who is the founder and owner of Kara.

The East Brunswick-based home builder filed for Chapter 11 bankruptcy on Oct. 5 after the company said it ran out of money. It reported that it has $350 million in assets and $227 million in liabilities.

Wednesday, December 06, 2006 12:47:00 PM  
Anonymous Anonymous said...

Great news, make that bastard accountable for his promises and his worthless "word". Bring his broken promises and outright lies to the surface so all can see what he was really all about. Rip apart his filthy little cocoon of lies and swindles. Force him to pay through the ass for what he's done.

Wednesday, December 06, 2006 1:03:00 PM  
Anonymous SCProfessor said...

Anon 12:47

Thanks for the update. Soon we will see a bunch of other banks and bonding companies filing similar actions. Then of course, Zudi will file his own bankruptcy or a few of these creditors will get together and invite Zudi into bankruptcy by filing an involuntary bankruptcy petition. Then Zudi, who has no doubt transferred property to his wife or other family members will learn the hard way about New Jersey's 4-year statute of limitations on what are characterized as Fraudulent Conveyances. Zudi, just in case you are not familar with this law, you can find a quick primer on it at:
http://tinyurl.com/y8pacw

The important part is quoted below:

Fraudulent Conveyance Law

In adopting the Act in 1988, New Jersey replaced the previously existing Uniform Fraudulent Conveyance Law. The Act was intended to prevent a debtor from placing his or her property beyond a creditor's reach. Gilchinski v. National Westminster Bank. Under the Act, fraudulent conveyance claims are permitted to allow creditors to undo transactions which are deemed "wrongful" so as to bring transferred property within the "ambit of collection." The Act has been adopted by at least 39 states and the District of Columbia and was in response to perceived deficiencies in the predecessor statute, the Uniform Fraudulent Conveyance Law, under which there were great discrepancies in interpretation nationwide as to statutes of limitations applicable to the avoidance of fraudulent transfers. To remedy those inconsistencies, the National Conference of Commissioners on Uniform State Laws recommended a uniform statute of limitations and such was included in the Act. The Act defines two categories of fraudulent transfer. There are those transfers made by a debtor with actual intent to "hinder, delay or defraud" any creditor of the debtor. This action is the so-called "actual" fraud provision. The Act also characterizes as fraudulent those transfers made where the debtor does not receive reasonably equivalent value in exchange if at the time of the transfer the debtor is effectively insolvent. This section is often referred to as the "constructive" fraud provision. There are limits on the amount of time creditors have under the Act to institute an action to set aside an alleged fraudulent transfer and N.J.S.A. 25:2-31 sets forth the Act's statutes of limitation. The time periods vary depending upon whether the allegation is that the transfer was made with actual intent to defraud or whether the transfer is alleged to be constructively fraudulent as a result of the inadequacy of consideration and the debtor's poor financial condition at the time of the transfer. As to transfers involving allegations of actual fraud, a cause of action with respect to such a transfer is "extinguished" unless the action is brought within "four (4) years after the transfer was made or the obligation was incurred, or, if later, within one (1) year after the transfer or obligation was or could reasonably have been discovered by the claimant;…." It is this "tolling" provision which was a major focal point of the recent New Jersey cases.

Wednesday, December 06, 2006 1:13:00 PM  
Anonymous Anonymous said...

Zud will also learn the hard way that no matter how many lawyers you hire, you cannot pay for things with promises & that people are not going to endlessly wait and wait for him to get his company and his act together. This reality was explained to him MANY times but he wasn't interested in listening.

Wednesday, December 06, 2006 1:24:00 PM  
Anonymous Anonymous said...

Could this be Zudi???????


Contractor will barter for massages

Reply to: sale-243398091@craigslist.org
Date: 2006-12-03, 8:48AM EST


Custom builder intersted in bartering for relaxing massages,swm,45.No job to small.







243398091

Wednesday, December 06, 2006 1:29:00 PM  
Anonymous Anonymous said...

Maybe you should be looking for a job instead of trolling Craigslist's personals.

Wednesday, December 06, 2006 1:48:00 PM  
Anonymous Anonymous said...

Anon 1:48

Maybe Anon 1:27 has a job as a senior Kara Homes executive, but has nothing else better to do during his busy workday than "trolling Craigslist's personals."

Wednesday, December 06, 2006 2:01:00 PM  
Anonymous Anonymous said...

A far as Zudi transfering property to Betsy. He did sell his shore house that was built by Kara but in Betsy's name for 1.3 million.

The house in Rumson I think is a Kara lease back where even though Betsy owns the house Kara Homes was paying Betsy for the house with the ability to use it as a model home.

I am not sure if the house is over 4 years old or not. If it is not I think when it was bought and built for free (by the subcontractors) it was in her name due to the fact Zudi has gone thru 2 other bankrupcies in the last 10 years.

I do not think those bankrupcies where even close to the dollar amounts we are talking now but he has been through the process.

An interesting note, Betsy has been on Kara's payroll for the past 5 years as a Design Consultant. So she was getting a big bi-weekly check and Zudi was getting a small check. (but since Kara paid all of their bills in the leaseback I am sure they have a ton of money in a offshore account) John Caserio should be able to tell that information.

Also Zudi's BMW, paid by the company his wife BMW, paid by the company.

Happy Holidays

Wednesday, December 06, 2006 2:07:00 PM  
Anonymous Anonymous said...

Maybe Anon 1:29 and Anon 1:48 should respond to this want ad:

WANTED for busy builder. Field Manager for large projects. Must be proficient with computers as job responsibilities include sitting in a construction trailer all day watching computer porn, surfing Craigslist and gossiping about various female co-workers. Ex-Kara Homes construction managers are strongly encouraged to apply.

Wednesday, December 06, 2006 2:15:00 PM  
Anonymous Anonymous said...

The house was trasfered to betsy last year Merry Christmas that son zudi has will be proud to be a Karajozi whats your dad do he lies and cheats people and your Dad

Wednesday, December 06, 2006 2:57:00 PM  
Anonymous SCProfessor said...

Anon 2:07 said, "it was in her name due to the fact Zudi has gone thru 2 other bankruptcies in the last 10 years."

Do you have any more information on these filings (Debtor's Identity, Court, Case No.)? Bonding companies for one would be interested if this is true. I suspect it is unlikely that Zudi would have disclosed this information when he applied for bonds and personally guaranteed their issuance.

Non-disclosure of a material financial fact likely equates to a non-dischargeability finding through his "to be filed" personal bankruptcy.

Wednesday, December 06, 2006 2:59:00 PM  
Anonymous Anonymous said...

SC, Prof.

One of the bankruptcies had to do with a restaurant he and G Brandt(one of the principles now at Kara)owned

I am not sure of the other. I do know that Zudi was taken to the cleaners in one of those two bankruptcies. If anyone has any info please post

Wednesday, December 06, 2006 3:05:00 PM  
Anonymous SCProfessor said...

The name "NOSTALGIC ICE CREAM, INC." popped up on a "officer/director" search of New Jersey Corporate Records. Anon 3:05, is this the name of the "restaurant he and G Brandt(one of the principles now at Kara)owned"?

Ice Cream. New Jersey in the winter. What's wrong with this picture in terms of the chances of a business success?

Wednesday, December 06, 2006 3:20:00 PM  
Anonymous Anonymous said...

Here is the bankruptcy for "NOSTALGIC ICE CREAM, INC."

http://tinyurl.com/yhgbpz

Wednesday, December 06, 2006 3:29:00 PM  
Anonymous SCProfessor said...

Anon 3:29, that link is actually Kara Homes Petition, Schedules, and Statement of Affairs. All 344 pages. The ice cream company is listed as some sort of an "affiliate" on page 16.

Interesting, the New Jersey Secretary of State search discloses 87 different entities where Zudi is listed as an officer/director. What clown would segregate what looks like 84 different building projects into separate legal entities (the ice cream store, Kara Homes and what I think is mommy's real estate company [Wanaque Realty] are the other three)?

The cost alone in keeping these things running (filing fees, etc.) would be a ton of money. Figure an initial filing fee of $125 for each entity. Couple that with the annual fees, accounting costs for separate entities, and ongoing organizational costs (keeping up corporate minutes, annual reports, etc.) and you are talking about a lot of expense. All that comes off the bottom line.

But then again, what a resume builder. "I'm the president and owner of 87 different companies," bragged Zudi.

Wednesday, December 06, 2006 3:53:00 PM  
Anonymous Anonymous said...

You take for granted that Zudi even cared about accounting for these 87 companies!! His track record suggests that he thought you just picked money out of trees. I worked for the guy, believed in him for part of the time I worked for him and didn't have a clue that he had gone bankrupt twice. I feel like a real shmoe!!!!!!!!!

Wednesday, December 06, 2006 4:47:00 PM  
Anonymous Anonymous said...

Forming an LLC for each individual community is pretty much common practice for residential builders, at least in NJ. This protects the parent company in case of default in a specific community. The individual LLC's are listed in the annual report and wrapped into the parent company's financials....

Wednesday, December 06, 2006 4:52:00 PM  
Anonymous Anonymous said...

ScProfessor,

It is common practice in NJ for builders to form a bunch of LLC's to protect the parent company. Usually, they only bankrupt those that are lost causes. Keep the good ones running. Why would Zudi declare all bankrupt????

Wednesday, December 06, 2006 5:31:00 PM  
Anonymous Anonymous said...

SCProfessor,

Once again, you really need to be more careful with your sarcasm. At times it has made you seem sort of, what's the word I'm looking for...ignorant. Segregating projects into individual LLCs is a very well known practice in this industry even among the national builders. (I'm sure that the CEOs of those companies would take exception to being called "clowns.")

To all of you who think of the Prof as the ultimate "expert," maybe this will finally make you reconsider.

Wednesday, December 06, 2006 6:25:00 PM  
Anonymous Anonymous said...

In the late 80's and early 90's Zudi partnered with Matzel & Mumford(now a subsidiary of KHOV)to build High Pointe in Old Bridge. Not sure if he filed for bankruptcy but he always talked about that as being some of the hardest years he lived. Then he decided to open a restuarant and guess what....that went under as well.

Wednesday, December 06, 2006 7:55:00 PM  
Anonymous Anonymous said...

What ever he touches sinks
look around didn't his boat sink

Wednesday, December 06, 2006 7:57:00 PM  
Anonymous Anonymous said...

scprofessor,

Can you find anything on the Kaplan Companies. They filed Chapter 11 and now are back, bigger and better than ever. They are builders in this territory. They are closer to an example of Kara Homes than - say "Marcal Paper Mills"????? What do you think?

Wednesday, December 06, 2006 8:35:00 PM  
Anonymous SCProfessor said...

Anon 6:25, I recognize the rationale for setting up projects as separate entities, just as I'm familiar with the laws associated with piercing the corporate veil (see http://tinyurl.com/qf78v). The underlying point that you apparently fail to recognize is Zudi's actions in public forums expressing concerns about those poor buyers doesn't ring true with his past actions.

You and I both know that he guaranteed the construction loans and performance bonds associated with each project. The LLC doesn't protect him against claims from these parties.

We both also know that the potential protection afforded by this method of LLC structuring is designed to avoid potential liability for construction defect claims down the road that would be commenced by the very buyers he claims to be concerned about.

If you are offended by my sarcasm, then I would suggest that you follow the directions I gave to the poster who criticized their length. Scroll by.

Wednesday, December 06, 2006 8:50:00 PM  
Anonymous A. Nonymous said...

Kara Xmas bash at Taco Bell in E.B. this Friday nite. BYOB.

Wednesday, December 06, 2006 11:36:00 PM  
Anonymous Anonymous said...

Come 1 come all to the 6th kara homes christmas party at my home
that all of you helped me gain by using my BS or you just believed
come take what you like because its not paid for and I do not have to because I am ZUDI The GREAT I can make anything fall.. you just have to believe..

Thursday, December 07, 2006 12:28:00 AM  
Anonymous Anonymous said...

SC, keep up the great work. I suspect the complainers still work at Kara. I wouldn't be surprised if the blog page was open at their desks tonight.
I need some help with this. When Zuhdi left California he did it in a big hurry. In '01 I recall hearing something in passing from one of our attorneys that he was spending way too much time fixing Z's mess on your coast. He lived in Southern California somewhere. Does anybody know exactly? I thought it was San Diego but not sure. If we knew, we could search those County databases, though I seem to recall it ws th state that was after him. I suspect it would be the same crap as he has going on now over here.

Thursday, December 07, 2006 12:30:00 AM  
Anonymous Anonymous said...

Anon 12:30, if the "problem was in California," it is an easy find. The major title companies have centralized title plants covering all 58 counties. I'll call in an IOU tomorrow and I should have the information by Monday at the latest.

Thursday, December 07, 2006 12:51:00 AM  
Anonymous Anonymous said...

Kaplan was around for over forty years before they went chapter 11. Marcal was used as an example to illustrate a business entering Chap. 11 w/ a solid plan in place. What was Zudi's plan again anyway? Oh yes, sell houses, then use the money to build more & sell those too and so on. Borrow and repeat as necessary. The same plan that failed before. I'm sure it'll work this time, though, what with the genius at the helm and all. Oh yeah, that's right, he doesn't have that total control anymore. He had to give it up because no one trusts him with money these days. Wonder why?

Thursday, December 07, 2006 1:02:00 AM  
Anonymous Anonymous said...

Attention: rumor has it that there are millions and millions of dollars in Kara cash secretly hidden away. All I can tell you is, the money is buried under a big "Z".

Thursday, December 07, 2006 1:04:00 AM  
Anonymous Anonymous said...

Anon 12:51. Thanks for your help on this. It looks like most of us are getting past feelings of shock and anger over Kara finally and focusing our attentions to bringing out the schmutz to help the case against him and Kara. This is what Zhudi deserves, all the daylight we can shine his way.

Thursday, December 07, 2006 1:25:00 AM  
Anonymous Anonymous said...

I believe it was Westwood CA or
might even have been the San Fernando valley CA Zudi said he went to UCLA. check it out Maybe there looking for him under the name Victor. he needs to have his freedom taken he needs to go to jail JK GB TJ HP TG AND ALL HIS OTHERS FLUNKIES TO

Thursday, December 07, 2006 1:26:00 AM  
Anonymous Anonymous said...

Or a big L

Thursday, December 07, 2006 1:35:00 AM  
Anonymous Anonymous said...

Anon 1:26 - Thank you, you are completely right. I could not recall exactly where he lived as it has been a while. Can't wait to find out Monday if there are any judgements or felonies on him in CA. Should be interesting as at the time a lot of resources where poured on it to deal with it.

Thursday, December 07, 2006 1:48:00 AM  
Anonymous Anonymous said...

Anon 1:26 responding:

I was able to locate one reference to UCLA in the article you can find at:
http://tinyurl.com/wovyw

This article also discusses Zudi’s relationship with Matzel & Mumford. A “must read” for those looking into his history. If it is to be believed, Zudi went to UCLA in the ‘80s. With regard to this claim, unless he was doing graduate studies, well it sort of makes you wonder since another article has him receiving “a bachelor’s degree in marketing from Boston college in 1981. (see http://tinyurl.com/yydlf5 )

Truth is you read all these "Zudi did this" and "Zudi did that" articles and you have to reach the logical conclusion that he must be at least 110 years old to do all the things he claims to have done in his lifetime.

Thursday, December 07, 2006 1:57:00 AM  
Anonymous Anonymous said...

SC Professor,

What you fail to recognize is that Zudi signed off on all those personal guarantees because he really, really believed he was invincible. He is not the "mastermind" you are making him out to be - just a man who believed himself to be a God in his business world. He can't accept his company will ultimately fail, and he will fight it to the very end. If his perseverence alone could win this war, then Kara would have a chance. Sadly, this is not the case.

The segregation of properties is not for the sole purpose you have mentioned. You have oversimplified. One of the primary reasons is this - Builders often buy land without final approvals. Many things can happen in the final stages of approval. In NJ if they find an endangered snake, frog or bush on your property you can be facing years of delays and wrangling with the DEP. Throw in some wetlands, disgruntled neighbors with water problems or an endangered bird nesting in a tree and you may never get your project up and running. Sometimes it's just best to cut your losses and walk away. And this is just one example among many.

One small observation - it has been said over and over that Zudi can never admit he is wrong and he doesn't like it when people challenge him. You may have something in common afterall. I would say that anon 6:25 didn't come off as offended, but you sure got defensive.

Thursday, December 07, 2006 9:14:00 AM  
Anonymous SCProfessor said...

Anon 9:14 said, "What you fail to recognize is that Zudi signed off on all those personal guarantees because he really, really believed he was invincible."

Oh come on. While I have no doubt that Zudi "believed he was invincible," to suggest he signed the personal guarantees for that reason is ludicrous. There is this thing in law called a "condition precedent." In real estate it is often referred to as a contingency. When the bankers or insurance companies laid the paperwork on the table for signatures they said something like, "No personal guarantee, no loan (or bond)." That's my story and I'm sticking to it.

You suggest another story. That at signing when no personal guarantee was to be found, Zudi would apparently insist that since he was invincible and was offended by not being offered the opportunity to sign a personal guarantee.

As I said above, I just don't buy your story. We will let the readership here make their own decision.

So, as the lender and bonding company attorneys read Zudi's applications (for loans and bonds) with a fine tooth comb, looking for non-disclosures that justify a finding of fraud that supports a Court's determination of non-dischargeability of their debt through bankruptcy, I'm sure they are enjoying reading this Blog as it will probably make their job easier.

Thursday, December 07, 2006 10:03:00 AM  
Anonymous Anonymous said...

A news report last week indicated that Bear was "bringing in a partner -- possibly Angelo, Gordon & Co. -- for the interim financing." Do we know anything about Angelo, Gordon and where this may be heading?

Thursday, December 07, 2006 10:32:00 AM  
Anonymous Anonymous said...

RE: invincibility: there is some truth to this, most definitely. The Z Man seriously believed whatever he touched was destined for success. I realize this may seem like a naive and somewhat glib assessment, but you must understand the ego at play here.

Thursday, December 07, 2006 11:14:00 AM  
Anonymous Anonymous said...

Zudi's ego was and is his downfall. No matter what he was told he said he could do it faster, better, cheaper and smarter than anyone else. He has a flair for design but he doesn't know much about practical construction detail. He constantly challenged his construction people to overcome impossible obstacles by saying he could do it if they couldn't. His designs were full of difficult construction challenges and there was little or no professional guidance for the field personnel. His ego wouldn't allow him to admit that what he dreamed couldn't become reality.

Thursday, December 07, 2006 1:04:00 PM  
Anonymous Anonymous said...

Isn't that the truth. The architecture dept. really went down after Rob left, especially the last couple of years. What happened to him?

Thursday, December 07, 2006 3:21:00 PM  
Anonymous Anonymous said...

Question - Why is SC so interested in Kara?

Answer (Rumor) - Z and SC know each other from CA days. Bad blood of some kind.

Just a rumor - but who knows??? Are any other bloggers from out of state? It does seem that his interest and time spent on this blog is way out of proportion for someone not involved in some way. Does anyone have any idea who this person is?

Thursday, December 07, 2006 4:33:00 PM  
Anonymous Anonymous said...

Maybe he's actually a Toll brother.

Thursday, December 07, 2006 4:44:00 PM  
Anonymous Anonymous said...

SC = Bob McGowan?

Thursday, December 07, 2006 4:53:00 PM  
Anonymous SCProfessor said...

Could it just be that I'm someone who cares about people who get hurt because of the actions of an ego maniac?

Speaking of helping, I'm interested in getting a copy of the two "deposit bonds" that are mentioned in today's APP article. Issuer appears to be Westchester Fire Insurance Company. They each apparently cover up to $2,000,000 in deposits. Claims apparently filed to date total $128,576. Lots of room there for additional claims.

So my thought process is if one of you kind people at Kara would scan and forward a copy of each bond to me, it will give me the opportunity to determine what the factual conditions are for filing a successful claim on the bond(s) and post my suggestions on this Blog. Email address is smiller1961ca@yahoo.com.

Now I recognize that if I'm able to provide information that is helpful for these poor purchasers, it will only increase Zudi's liability to the bonding companies. But that's life.

Thursday, December 07, 2006 6:13:00 PM  
Anonymous Anonymous said...

Maybe it's George Bush Sr that's who
Zudi claimed to know alot of people and screwed a lot of people to. Maybe Zudi thinks the way to do business is to go bankrupt every few years. How does Zudi get away all the time? Why is the A G office not speaking to any former or present employees I'm sure some would sing like a birds.I'm sure people would sing to see Zudi go to jail. Talk to people that got beat out of bonuses. Zudi had a lot of clout with political people.Kathy Lodotta said she was connected to politicians through out monmouth and ocean countys .She would be all over freeholders or councilman for Zudi's cause.Every year at Kara's Christmas party's there were always freeholders or councilman there year in and year out. Zudi would always meet with them on different sites. Kathy would always be going to lunch with them For Zudi that sounds like somthing to look into
I'm sure you might be able to dig up something.. "ALLA"

Thursday, December 07, 2006 6:31:00 PM  
Anonymous Anonymous said...

I Think Its Charles Applebaum
from the west coast

Thursday, December 07, 2006 6:33:00 PM  
Anonymous Anonymous said...

For those interested in Kara's downfall, an appeal to the final financing order was filed by North Fork Bank. SCprofessor, what are the implications when an appeal is filed against a financing order? Will they get the money to continue their operations or is it on hold until the US District Court rules?

Thursday, December 07, 2006 6:35:00 PM  
Anonymous Anonymous said...

WOW

Thursday, December 07, 2006 6:38:00 PM  
Anonymous SCProfessor said...

Anon 6:35, excellent question and one I'm not going to shoot from the hip answering. Best way to do that is to start with a question. Are they seeking a Stay of the Bankruptcy Court's Order pending Appeal?

Don't you just hate that. A question answered with a question. If you are looking for a reason for my question, check out:
http://tinyurl.com/y93av2

Thursday, December 07, 2006 6:53:00 PM  
Anonymous Anonymous said...

I am an unsecured creditor. Went to the first meeting in November and it was continued untill today.
Unfortunately, I have to work twice as hard to get out from under this bankruptcy mess and could not attend todays Creditors meeting. If anyone knows what happened - if anything - today - please let me know. Zudi hasn't showed up yet at a meeting. I guess he didn't show today? Any info would be appreciated.

Thursday, December 07, 2006 8:39:00 PM  
Anonymous Anonymous said...

Judge Kaplan sure has his hands full with his first case in the Bankruptcy Court.

Wow is right.

Thursday, December 07, 2006 8:41:00 PM  
Anonymous Anonymous said...

Hey, the seasoned judges no doubt dumped this one on him. No sense taking the heat when you don't have to......

Thursday, December 07, 2006 8:47:00 PM  
Anonymous Anonymous said...

Flas vetëm pak Shqip. But with Zud, it was never, "Sa kushton ajo?", or "A ke ndonjë më të lirë?". With him, it was always, "A pranoni kredit?". Now I feel as if më kanë vjedhur kuletën, ya know? Excuse me, EWR to TIA is now boarding and I have to go now.

Friday, December 08, 2006 2:41:00 AM  
Anonymous Anonymous said...

Kuptova !

That is all very good, The only thing is I don't think he ever asked how much anything cost, He is now asking "Ku është banka më e afërt ju lutem?"

See you in Albania.

Friday, December 08, 2006 8:04:00 AM  
Anonymous Anonymous said...

he can run but not hide
do you think

Friday, December 08, 2006 10:39:00 AM  
Anonymous Anonymous said...

RE: anon 8:39- Just like when he was running the company, if he owes you money you won't see Zudi unless he absolutely has to be there. But you already know this, as do I.

Friday, December 08, 2006 12:58:00 PM  
Anonymous SCProfessor said...

Who is SCProfessor?

Seems a great deal of time is being spent on trying to figure out why I’m so interested in Kara Homes and the rumor mill has been busy trying to tie my identity to people currently associated with Kara Homes or Zudi its former majordomo. I have repeatedly stated in the past that I did not know of the existence of Kara Homes (or Zudi) before learning about it by doing a simple Google search, utilizing the key words “bankruptcy” and “real estate.”

The truth is that I am actually a professor with a more than adequate experience in bankruptcy related matters to express the opinions I have provided in this forum. My interest in this case centers upon the development of a new course that focuses on “fraud examination.” This course will be designed to leverage off of the resources provided by the Association of Certified Fraud Examiners in association with its Higher Education Initiative (see http://www.acfe.com/membership/educate.asp ).

One of my goals with this new course is to bring forth recent and relevant factual situations and incorporate them into case studies where there is a likelihood that fraudulent activities exist. Now I am not saying that such activity exists relative to what has gone on in the past with Kara Homes. However it has been my experience that bankruptcy settings provide a window into what would normally be closed doors where, because of the public nature of the proceeding, I will have an opportunity to see as you will whether or not evidence of fraudulent activities exists, and if so what sort of inventive schemes were used.

In following this case I have periodically provided commentary designed to do what I do. That is teach. Right or wrong, it is difficult to view the readership here as anything other than my students. Bankruptcy processes are complicated and sometimes do not sense. For example, if you received a payment within 90-days of the filing of Kara’s petition, there is a reasonable chance that you may be required to return that payment because it is what is called a preferential payment. Sadly funds returned to the Debtor estate will likely not filter down to be distributed to unsecured creditors, but used either to repay the Bear Stearn’s loan(s) or to pay professional fees. For more on preferences under Section 547 of the Bankruptcy Code, look at: http://tinyurl.com/y9pv2k .

An unhappy result of my comments for some of you is I have not taken a neutral stance. That is certainly my right. I favor supporting the interests of duped buyers and Kara’s trade creditors over the interests of Kara, its leadership, its banks, and its bonding companies. Hence the basis for providing information on how they should look into the possibility of doing what they can to protect their positions in this proceeding.

Any help by way of information that you can provide that makes the case study I’m preparing a more accurate representation of what has occurred is greatly appreciated. Please feel free to email me at smiller1961ca@yahoo.com.

Kindest regards,

SCProfessor

Friday, December 08, 2006 2:01:00 PM  
Anonymous Anonymous said...

SC Prof

What is funny is for years Zudi has told people that someone was going to write a book about him and the amazing rise ofKara. If you lecture turns into a book he will have gotten his wish. (I think he was looking forward to a book that put him into the same pantheon as W Buffet)

Now he is right up there with Ken Lay!!!!!

I see a good novel or a "True Rumson, NJ Story" on the E Channel!!!

But you have to use Zudi's real name, Victor. He uses Zudi to perpatrate the myth that he is was a immagrant that made good. (sort of like Aria Hovanian which Zudi wishes he could be)

Make sure when you are writing the lecture ask if any of your students are from Detroit, and if they are ask them if the know Robbie or Hektor. (the Ying and Yang of Kara Homes)

Friday, December 08, 2006 3:00:00 PM  
Anonymous Anonymous said...

The Prof is legit. The e-mail address is good and so is he. Could someone please help with the deposit bonds request? We need to help the Prof help the victims as much as we can. Regards.

Friday, December 08, 2006 3:32:00 PM  
Anonymous Anonymous said...

The bonds SC Prof mentioned related to The Landings at Manahawkin. Are there similar deposit bonds in place for any of the other developments?

Friday, December 08, 2006 4:15:00 PM  
Anonymous Anonymous said...

Re: Kara Homes book, I'm toying with the idea of doing that myself. "Builder Of Schemes" is my working title (seriously). Catchy, no?

Friday, December 08, 2006 5:05:00 PM  
Anonymous SCProfessor said...

Anon 4:15 said, "The bonds SC Prof mentioned related to The Landings at Manahawkin. Are there similar deposit bonds in place for any of the other developments?"

That sort of limiting conclusion causes problems. The only way that I would be willing to accept that a particular bond relates to a particular project is by reading the bond. Let's not assume that just because a newspaper article says it; that means it is true. Recall that "assume" can result in making an "ass out of "u" and "me." I cannot overstate the need to view a copy of the actual bond before making any sort of decision about what it covers or does not cover.

Friday, December 08, 2006 5:12:00 PM  
Anonymous Anonymous said...

SC,
In NJ multi-family communities or any community with an association must post a bond in order to accept deposits. The purpose of these bonds is to cover the home owner in case the builder defaults, which in this case Kara has. In short order to answer the other poster question, yes, there are many other communities on Kara's books with those types of bonds.

SC, wake up on the wrong side of the bed today? The other posters question was innocent enough, no need to jump all over him/her.

P.S. I think it's pretty ballsy of you to ask a Kara employee to fax you a copy of the bond. Sounds pretty fishy to me, like something that could cause one to get fired..... If its a matter of public record why don't you just contact the bond company and request a copy? Also, I'm sure the invoices for said bonds are not paid up, wonder what happend there......

Friday, December 08, 2006 5:21:00 PM  
Anonymous Anonymous said...

LOL - cause one to get fired? I didn't realize Kara had to have a reason, other than "we're broke".

Friday, December 08, 2006 5:40:00 PM  
Anonymous Anonymous said...

Serious question: does anyone know why Hektor is listed as the seller in so many RE transactions?

Friday, December 08, 2006 5:50:00 PM  
Anonymous SCProfessor said...

Anon 5:21, I’ll accept the adjective “ballsy,” as being a complement. I’m that and direct, and I hate to make repeated requests about what I need to make an informed recommendation. As to the potential Kara employees might have in loosing their jobs, well I’d like to think that a few of them (excluding you of course,) would have feelings about what Kara’s leadership did to home buyers by diverting their earnest money deposits to uses other than the completion of their homes (e.g. making the monthly payments on Zudi’s BMW).

Your point about there being a variety of bonds is important and underlies the importance of actually reading them. I’m unsure about why you commented, “I'm sure the invoices for said bonds are not paid up, wonder what happend (sic) there......” My sense is that it is some sort of an attempt to dissuade potential bond claimants from following a path to recover their deposits, which if successful would increase Zudi’s exposure to the bonding companies.

Friday, December 08, 2006 5:52:00 PM  
Anonymous SCProfessor said...

Please note that updated information has been posted on the Unsecured Creditors' Committee blog located at:
http://karahomescreditors.blogspot.com/

Friday, December 08, 2006 8:28:00 PM  
Anonymous Anonymous said...

SC, you've been coming off as a douche bag lately.

Friday, December 08, 2006 9:04:00 PM  
Anonymous Anonymous said...

RE: SC 5:52
I wouldn't call this being a douche bag as the last poster did, but rather an arrogant Prick. This isn't the class room-No one here is really being helped by you. You are using something that affects MANY peoples lives as a learning tool for your little lecture halls and attempting to have those on this forum supply you with more fodder for your lectures. Get off your high horse and find some local Cali builder who is in the crapper. I'm sure there is a line of them.

Friday, December 08, 2006 9:12:00 PM  

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