Thursday, February 22, 2007

Bubble Info Here

Since my blogging has been slow lately, it probably worth taking a look at the Seeking Alpha Website for relevant housing bubble commentary. Here is the link to Seeking Alpha

"Judy Weil submits: Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can get this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service."


Anonymous Anonymous said...

You need Kara Homes to do something that pisses people off. That will increase the traffic to your site.

Start a Kara thread and you will be ok

Friday, February 23, 2007 3:33:00 PM  
Anonymous Anonymous said...

hey silver, i hope you're okay. great articles on real estate in the ny times on 2/22. check out the op ed peice. very disturbing.

Friday, February 23, 2007 4:21:00 PM  
Anonymous Anonymous said...

oh yeah... please everyone! there are certain folks in the town of belmar who want the famous "djais" nightclub shutdown. djais is a wonderful "3rd" place that for years has given great summer fun and memories to literally millions of people. the owners have contributed greatly to the community there. places like djais are so important to a community. but, the rich people want it gone to be replaced by mcmansions. anyone would agree by now, what would have been better - to keep tradwinds open or replace it with the mcmansions that now sit there? so please, for the sake of the good people of nj and the shrinking working and middle class, the community needs a place where "all" good people can dance! and have a little fun. email/call the powers that be in belmar and demand that they leave djais open! you can reach them at: go to municipal then municipal directory. please do this soon, a final hearing is scheduled for 2/28 thanks.

Friday, February 23, 2007 4:36:00 PM  
Anonymous Anonymous said...

I couldn't agree more. These asshole developers market a shore "lifestyle" that consists of being able to see the ocean from your kitchen. The shore will soon be no more than a backyard for the privileged.

Friday, February 23, 2007 5:04:00 PM  
Anonymous Anonymous said...

What happened to the Kara thread????

Friday, February 23, 2007 6:04:00 PM  
Anonymous Anonymous said...

What developments merit a new Kara thread? It's still just nothing but "soons" and "gonnas" over there. All talk, never any action & whatever action there is only benefits them and no one else. The whole thing is the definition of pathetic, just like the company itself.

Friday, February 23, 2007 6:37:00 PM  
Anonymous Anonymous said...

Kara Homes Bankruptcy is dwarfed by SOLOMON DWEKS Federal case involving 350 Real Estate properties worth approx. $400 Million !!!


Bankruptcy Court takes on Dwek case
Posted by the Asbury Park Press on 02/23/07

TRENTON — A U.S. Bankruptcy Court judge on Thursday ordered that a federal trustee be appointed to manage the half-billion dollar empire of troubled real estate tycoon Solomon Dwek, wresting the case from state Superior Court.

In making her decision, Judge Kathryn C. Ferguson noted that allegations of fraud and malfeasance by Dwek "permeate just about every aspect of this case."

But the decision was nevertheless welcomed by both Dwek and PNC Bank, which successfully petitioned a state court judge to freeze Dwek's assets in May after the Ocean Township man bounced a $25 million check at PNC's Eatontown branch office.

That unlikely transaction and the freezing of Dwek's assets triggered a flurry of claims against Dwek of debt, fraud and deceit. Collectively, some 100 banks, investors and others claim the 34-year-old former top administrator of the Deal Yeshiva owes them more than $400 million. Dwek also faces federal bank fraud charges as a result of the bounced PNC check.

HSBC Bank, which says Dwek owes it more than $57 million, contested the move to bankruptcy court. One of HSBC's lawyers, David N. Ravin, questioned whether it was the product of an "unholy alliance between Mr. Dwek and PNC, who in fact should be tearing each other's hearts out."

But PNC lawyer Peter A. Forgosh told the judge that such statements were a "distraction" from the facts that PNC had filed for an involuntary bankruptcy liquidation, that Dwek asked for it to be converted to a voluntary bankruptcy reorganization, and that both Dwek and PNC Bank wanted a trustee appointed to manage Dwek's assets and sell them off to pay creditors.

Judge Ferguson also granted Dwek's request to allow Dwek a reorganization bankruptcy, which could allow Dwek to recover with some debts paid, other debts canceled, and with a functioning business. PNC Bank had initially petitioned for a liquidation of Dwek's assets, but agreed to support Dwek's request after negotiations.

The transfer of the case from state Superior Court in Freehold to bankruptcy court could spell trouble for HSBC, since Dwek used $22 million of that $25 million bogus deposit at the Eatontown branch to pay a debt to HSBC. Dwek also transferred 129 properties, which were secured by HSBC loans, to his uncle just after bouncing the check.

The bankruptcy judge could order the $22 million and the 129 properties returned to Dwek's holdings.

Courtroom crowded

More than 50 lawyers, Dwek creditors and others gathered in Judge Ferguson's courtroom Thursday. The boisterous scene was reminiscent of the day last May when more than 100 lawyers, creditors and criminal investigators crowded into the largest courtroom in Monmouth County to hear Superior Court Judge Alexander D. Lehrer announce that he was appointing a fiscal agent to manage Dwek's holdings, and that Dwek's assets would be quickly sold to maximize profit for his creditors.

With his fiscal agent, Donald M. Lomurro, Lehrer wrangled the complex case involving dozens of lawsuits, entered more than 200 orders, and posted more than 2,000 case documents on a publicly available Web site — an unusual move for a state court. But the judge sold only 27 properties to raise $33 million, while Dwek owns more than 350 properties worth as much as or more than $400 million.

In arguing that Lehrer and Lomurro had worked to the benefit of all creditors and should continue to manage the case, another HSBC lawyer, Howard "Peter" G. Sloane, told Ferguson, "The fact that all these people in the back of the room are so friendly . . . is because for the last seven months they have been living in a courtroom with Mr. Lomurro."

But the months of litigation have been costly. Dwek's assets were drained of more than $2 million to pay the teams of lawyers working for both Lomurro and Dwek. And just PNC and HSBC claim legal bills of almost $5 million.

Some lawyers critical

Approval of the job that Lomurro and Lehrer were doing was far from universal.

Several lawyers representing clients who wanted the case out of Lehrer's jurisdiction criticized the judge's ad hoc quasi-bankruptcy process as inadequate for the task.

Washington Mutual Bank, which says Dwek and his wife Pearl owe it more than $22 million, said in court papers it has repeatedly tried to learn more about offers to buy properties securing the bank's loans, and about other relevant issues.

"The fiscal agent has uniformly ignored us," wrote the bank's lawyer, Stephen M. Packman.

Lomurro has said that he was faced with a Herculean task, but nevertheless brought order to a chaotic situation.

"No professional wants to walk away from a job half done," he said.

Fran Steele, an attorney representing the U.S. Trustee's Office, said the office would name a trustee to manage Dwek's assets today or Monday. Who that person is, and how they choose to reorganize and sell off parts of Dwek's holdings could mean gaining or losing millions of dollars for various creditors.

As lawyers for various creditors waited to tell Steele Thursday who they recommended for the job, Dwek's lawyer, Timothy P. Neumann, noted, "Some of the most important decisions today may be made in the hallways."

The bankruptcy court Thursday scheduled March 29 for the first meeting of Dwek's creditors in Trenton, and said all claims against him must be filed by June 27.

Friday, February 23, 2007 11:03:00 PM  
Anonymous Anonymous said...

So, Zudi is no longer the king of the bankruptcy cases in the NJ Bankruptcy Court. He must feel like that stalker astronaut when Anna Nicole Smith's death took the spotlight of the main stream media away from her.

Saturday, February 24, 2007 2:44:00 PM  
Anonymous Anonymous said...

Ah, yes, but Schlomo Dwek didn't leave as many people unemployed and homeless, either. He did a better number on the banks than Karagjozi did, though, for sure. What they do have in common is how they're both being treated with kid gloves in court. Crime pays, the trick is to simply use someone else's money.

Saturday, February 24, 2007 6:07:00 PM  
Anonymous Anonymous said...

More neglected Kara trash:

Monday, February 26, 2007 9:40:00 AM  
Anonymous Anonymous said...

A big mess in the backyard
Bankrupt developer leaves piles of misery for neighbors
By TIMOTHY PUKO Staff Writer, (609) 272-7275
(Published: February 26, 2007)

HAMILTON TOWNSHIP — When Mario Schlenger looks out through the square glass panes in his kitchen doors, he sees a ghost town.

No one lives in the half-finished homes along Monet Drive behind his house. Brick houses sit empty with bare plywood for garage doors. Thin, frozen pools sprawl aimlessly through the sandy dirt of empty lots. An upside-down Magnavox television sits behind a garbage pile of crumbled cinder, baked bricks and plastic bags full of drink bottles.

“It was beautiful back here and then they came along,” Schlenger says. He grunts in disgust and turns his white-bearded face away from the doors and toward the floor before finishing. “And made a mess of it.”

“They destroyed it,” his wife Diane adds.

What was once woodlands has become wasteland at the Glen Eyre housing development, one of the most decayed projects in the region left abandoned by bankrupt builders Kara Homes. It could cost more than $25,000 just to clean up the trash at the site, which means the township cannot even act on the problem right now without putting the project out to bid, the township administrator said.

While Hamilton may have one of the worst sites, safety hazards, lost tax revenue and inconvenienced residents living in neighborhoods of empty homes have highlighted problems at nine other Kara developments in southeastern New Jersey. Lacey, Little Egg Harbor and Stafford townships in Ocean County and Galloway Township, Atlantic County, are also among 18 towns in the state where Kara abandoned construction sites after filing for Chapter 11 bankruptcy in October.

Those towns' governments and residents can only wait as Kara receives bankruptcy protection while sorting through the lengthy reorganization process.

“We'll keep citing them. We're not going to back off,” Hamilton Administrator Edward Perugini said. “As far as forcing them, as far as monetary solutions, they're in bankruptcy, so what are you going to do?”

“They are in bankruptcy, so there's little teeth that we have in this matter,” he added.

The garbage started piling up at Kara's Glen Eyre in October. A company Kara had rented trash containers from retrieved those, but emptied the garbage onto in the empty lots.

The Schlengers were eating lunch when they saw a truck arrive for the last trash container in November. Mario Schlenger, 66, said “thank God” in the moments before he realized the driver was not taking the construction waste away, but instead unloading all the bricks and concrete within sight of their kitchen and deck.

That waste pile and two others in the development then grew, targeted by illegal dumpers looking to jettison mattresses, old appliances and other random trash.

“It makes it difficult to have guests out back when you're staring at a pile of garbage,” Diane Schlenger said.

The township has ticketed Kara for littering, $1,200 for each location, and even had company officials in court Jan. 31. They promised the judge Kara would clean the site, Perugini said, but all such promises must be subjected to the red tape of reorganization before being fulfilled.

“It's certainly a large problem for the people who live out there, and we're doing everything within our power to clean this up and (expedite) that,” Perugini said. “We've exhausted every resource we have to pursue them on this.”

The township looked at cleaning up the waste itself, but the high cost would trigger a lengthy bid process. Hamilton will continue pursuing the issue through the courts, Perugini said.

Stafford Township's clean up was not as expensive. There was garbage at the 197-unit condominium project in the Manahawkin section known as The Landings, but it was sparse. The big cost was a dug, but unfilled foundation.

“It was an immediate safety hazard,” Stafford Administrator Paul J. Shives said.

It cost the township between $5,000 and $6,000 to fill it, fence off two other foundations and clean up the scattered trash, Shives said.

What looms larger now is a half-million dollars in missing tax money for the township. Stafford, which usually has a near-perfect tax-collection rate, saw that rate drop by almost a half-percentage point last year because of Kara's problems.

One Hamilton committeeman said Kara's bankruptcy played a significant role in helping create a budget crunch in the township. While the township solicitor said it was only a small role, Perugini said the loss of tax dollars from Kara would be felt.

“This year we not only have the same expenses, we're trying to do the same if not more with less revenue,” he said.

That money should come back to Stafford and Hamilton once the Kara properties are sold, a scenario both administrators consider a near certainty. Just last week the company began advertising an auction for smaller properties in Stafford and Little Egg Harbor townships, as well as developments in Toms River and Middlesex County.

Like Galloway and Lacey townships, Little Egg Harbor Township's problems with Kara developments have not been as severe. It has had trash, but no illegal dumpings, and the impact on taxes will be negligible as well, Administrator Raymond Urezzio said.

What all the townships have are incomplete neighborhoods where some new residents are left to live next to empty homes. They live on streets left without proper pavement, and with sewer lines that backed up and sprinkler systems that burst this winter.

One Manahawkin resident said there have not been many problems yet, but others in the same condominium complex and residents in Galloway decried their unfinished Kara neighborhoods as ugly and unsafe. Those unhappy residents said they had to pay $10,000, and may have to pay $40,000 more to finish sidewalks and landscaping that was promised to them.

William Smith and his neighbors in Manahawkin's The Landings pay $200 per month to Kara for their units to be cared for, yet no one is around to do that, Smith said. When pipes froze and burst this winter, his garage flooded and a neighbor's home flooded.

“It's pathetic, the way it's being handled, the whole place,” Smith said. “The workmanship that was done here, the grading, the grounds, you name it, personally, I think it stinks.

Monday, February 26, 2007 11:30:00 AM  
Anonymous Anonymous said...

hey, Kara has other stuff to worry about right now, like back pay & paying Zudi's AMEX bill.

Monday, February 26, 2007 3:24:00 PM  
Anonymous Anonymous said...

You have to love Kara Homes they just ruin peoples lives.

Zudi, you need to go back to Albania!!!!

Monday, February 26, 2007 6:41:00 PM  
Anonymous Anonymous said...

I'm not sure if seeing a pile of cinder blocks from your back yard exactly ruins your life

Monday, February 26, 2007 9:23:00 PM  
Anonymous Anonymous said...

When you pay 600K plus for a house I gotta agree thats the last thing I want to see.

Monday, February 26, 2007 11:40:00 PM  
Anonymous Anonymous said...

I have to laugh, because my first reaction upon seeing "Glen Eyre" was, "holy s**t, this is one part clusterf**k & one part eyesore". It's apparently remained true to form during Kara's crucial and lengthy "re-organizational" period. Yet another monument to the hubris of a certain Albanian-American who has been mentioned on this blog once or twice.

Tuesday, February 27, 2007 12:36:00 AM  
Anonymous Anonymous said...

Auction planned for Kara homes in six developments
Posted by the Asbury Park Press on 02/27/07


An auctioneer will sell the remaining uncompleted homes and vacant building lots in six Kara Homes developments in Ocean and Middlesex counties on March 22, an auction company announced today.

The six residential developments are: Prospect Ridge Estates in Stafford, consisting of four-partially completed homes and six vacant building sites; Dayna Estates in Toms River, consisting of three partially completed homes and two vacant sites; Hartley Estates in Little Egg Harbor, consisting of one partially completed home and eight vacant building sites; Sterling Acres in Monroe, consisting of five partially completed homes; Woodland Estates in Edison, a 14-unit approved subdivision that has not yet been constructed, and; Park Meadow in
Edison, consisting of one partially completed house and six vacant properties.

East Brunswick-based Kara filed for Chapter 11 bankruptcy Oct. 5, saying the real-estate market downturn prevented it from paying its debts. The company reported $350 million in assets and $227 million in liabilities.

Since then, the company and its chief restructuring officer, Perry Mandarino, have been identifying which properties Kara should sell off.

"The decision to sell a number of Kara Homes developments is part of our overall
restructuring plan; a plan that, when complete, will empower Kara Homes to return to profitability and to continue to operate as one of New Jersey's premier home builders,'' said Perry Mandarino, the chief restructuring officer, in a statement today.

The auction is being run by Sheldon Good & Co. Auctions Northeast LLC and DJM Realty, a Melville, N.Y., real-estate disposition firm.

When was Kara a "premier" home builder, for like ten minutes in 04?

Tuesday, February 27, 2007 1:53:00 PM  
Anonymous Anonymous said...

Every single word that comes out of Kara's office is sheer bullshit.

Tuesday, February 27, 2007 4:34:00 PM  

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