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alstry (35.35)

SPF going BK?

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March 21, 2008 – Comments (5)

Some of you know SPF has been my HB whipping boy for about a year now. 

Its CEO, Steven Scarborough, abruptly resigns yesterday after leveraging SPF to levels never seen in the company's history and recently amends his bonus plan?

The "new" CEO is a board member who was making token open market share purchases late last year just before SPF issued negative press releases?  Now his salary is likely to cover those share puchase costs in a very short period of time.

In December, SPF tells shareholders it has no plans for bankruptcy after issuing a very dilutive convertible offering and violating its debt covenants twice plus about to violate for a third time? 

In February, management brags to shareholders about how much cash they have in the bank but fails to tell them that spend obligations would wipe that cash out in a very short period of time.

Now, Scarborough "abruptly" resigns and likely to get a very generous severence package from his newly amended bonus plan.

When the new CEO was asked on the conference call the following:

"Just want to confirm straight up.....the thinking here is not to take the company into bankruptcy soon.....?"

The new CEO's response:

"I don't think it's appropriate to to comment on that at this call.............."

Folks, anyone think BK planning has been in the works for months?  SPF has been building out its communities and paying down less relative debt than just about any public HB.  It has almost six times the debt versus backlog.  Now many of its specs are complete and ready to generate cash under a reorganized debt structure. 

Its executives recently got bonused millions shortly after they eliminated the shareholders' dividend(interestingly, the CEO didn't get a bonus at the time).  But not to be left out in the cold,  Scarborough will likely grab millions as he runs out the door before resolving the negotiations on the company's violation of its debt covenants for the FOURTH time. 

It has been an amazing ride to watch these guys mislead shareholders and put millions into their pockets. 

Now, the "independent" board member that was supposed to protect shareholders is taking over and it's his turn in the honey pot?  What has happened to character in corporate America?

Sionara Shareholders.

5 Comments – Post Your Own

#1) On March 21, 2008 at 2:01 PM, dwot (69.62) wrote:

Really, I hadn't noticed, lol...

There are many companies that are disgusting towards shareholders, and shareholders simply haven't dumped the stocks in protest.

To be honest, I had one where management was so dishonest.  I had met them face to face and asked questions, all were answered with lies, manipulation and deception.  As it turned out there was money to be made, so it was plug the nose and wait for a gain and then sell.  What can I say, my ethics were bought...  I forget what I made on that one, $10-20k probably.

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#2) On March 21, 2008 at 2:02 PM, alstry (35.35) wrote:

In a conference call, Peterson (at left) declined to say whether the company is contemplating the filing of bankruptcy or to explain why Scarborough abruptly retired after eight years at the helm.

Peterson, 62, vowed to act with “a sense of urgency,” promising to “move quickly and decisively” in formulating a new long-term strategy for the firm. Peterson said his first goals will be a seamless transition into his term as leader and ensuring the continuity of the company and its operations.

In a conference call, Peterson (at left) declined to say whether the company is contemplating the filing of bankruptcy or to explain why Scarborough abruptly retired after eight years at the helm.

Peterson, 62, vowed to act with “a sense of urgency,” promising to “move quickly and decisively” in formulating a new long-term strategy for the firm. Peterson said his first goals will be a seamless transition into his term as leader and ensuring the continuity of the company and its operations.

http://lansner.freedomblogging.com/2008/03/20/builder-standard-pacifics-ceo-retires

"There are a whole host of things that we need to address," he said. Peterson didn't identify the issues of which he spoke but repeated that he would be tackling them with a "sense of urgency."

"It's been a very challenging market environment," he said. "We are still delivering homes and we have a positive margin on these homes...but the reality is we need to start focusing on a long term strategy...I think the one thing that is underscored here is a sense of urgency...We are going to move forward with immediacy and not table [issues] for another quarter."

Responding to a specific question about whether the urgency was due to a potential filing for bankruptcy, Peterson said, "I don't think it's appropriate to comment on that at this time on this call."

http://www.bigbuilderonline.com/industry-news.asp?sectionID=0&articleID=676216

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#3) On March 21, 2008 at 2:24 PM, alstry (35.35) wrote:

In a conference call, Peterson (at left) declined to say whether the company is contemplating the filing of bankruptcy or to explain why Scarborough abruptly retired after eight years at the helm.

Peterson, 62, vowed to act with “a sense of urgency,” promising to “move quickly and decisively” in formulating a new long-term strategy for the firm. Peterson said his first goals will be a seamless transition into his term as leader and ensuring the continuity of the company and its operations.

In a conference call, Peterson (at left) declined to say whether the company is contemplating the filing of bankruptcy or to explain why Scarborough abruptly retired after eight years at the helm.

Peterson, 62, vowed to act with “a sense of urgency,” promising to “move quickly and decisively” in formulating a new long-term strategy for the firm. Peterson said his first goals will be a seamless transition into his term as leader and ensuring the continuity of the company and its operations.

http://lansner.freedomblogging.com/2008/03/20/builder-standard-pacifics-ceo-retires

"There are a whole host of things that we need to address," he said. Peterson didn't identify the issues of which he spoke but repeated that he would be tackling them with a "sense of urgency."

"It's been a very challenging market environment," he said. "We are still delivering homes and we have a positive margin on these homes...but the reality is we need to start focusing on a long term strategy...I think the one thing that is underscored here is a sense of urgency...We are going to move forward with immediacy and not table [issues] for another quarter."

Responding to a specific question about whether the urgency was due to a potential filing for bankruptcy, Peterson said, "I don't think it's appropriate to comment on that at this time on this call."

http://www.bigbuilderonline.com/industry-news.asp?sectionID=0&articleID=676216

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#4) On March 21, 2008 at 3:06 PM, bellard (99.34) wrote:

Al;

Congrats on getting Scarborough fired! Just listened to the CC also. Scarborough was asked to leave or feel the knife! Or maybe Scarborough just could not take your Yahoo rantings about him!

My personal  view of the CC was that the board felt Steve was so focused on liquidating assets and putting out fires - he forgot about planing for SPF future business(if there is one). I did not get the feeling this means impending trouble or BK, but who knows? SPF has all the cash they need for 2008, but maybe Steve left because he knows the banks are forcing SPF hand on its NAV covenants.....

I still think SPF will trade between 3-6 in the near future. SPF announcing this news after the close, before a 3 day weekend is LAME imho - maybe they think the market will have forgotten by Monday. Etrade tried this move in the fall, and got slammed!

BTW;have you bought your canned goods and spam yet? Or are you waiting for the bunker to be complete?  HA - just kidding!

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#5) On March 21, 2008 at 3:13 PM, alstry (35.35) wrote:

"BTW;have you bought your canned goods and spam yet? Or are you waiting for the bunker to be complete?  HA - just kidding!"

Don't laugh...............what's coming may shock you.  My neighbor, a West Point grad used to make fun of what I was saying until he read something in the Economist.  Then he started reading everything he could and can't believe what may be ahead.   He is now more extreme than me.

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