In early period of year 2009, Lennar Corporation, one of the major homebuilders in the U.S., found itself in the midst of a deep global depression, a major credit crisis, a housing price collapse, and enormous mortgage defaults activated by double digit unemployment in the U.S. At the exact same time, the business faced criticism from the Fraud Discovery Institute (FDI) that a big personal loan taken out by a Lennar executive from a connected party, and the company's substantial use of joint ventures to develop, construct, and market dwellings was deceptive.
Lennar Corporation’s Joint Venture Investments Case Study Solution
FDI was co-founded by Barry Minkow, who was previously tried and convicted on 57 counts of securities fraud and sentenced to 25 years in federal penitentiary subsequent to the collapse of ZZZZ Best Company, Incorporation. At November 30, 2008, Lennar had 116 unconsolidated joint ventures. Anna Amphlett, a financial analyst with Southern Cross Investments LLC, was requested to prepare a report on the joint ventures of Lennar and the processes used to report for these savings. According to the FDI, the main motive for the company's joint ventures was to fund its reserves with "off-balance sheet" debt. The discharge of the FDI account resulted in a 20% fall in the stock price of the company.
PUBLICATION DATE: September 23, 2010 PRODUCT #: TB0235-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Financing New Ventures
International Entrepreneurship: Managing and Financing Ventures in the Global Economy–Overview
Back to School: Real Estate Development of Off-Campus Student Housing
R & D Electronics Company
Perception and Readiness of Japanese Companies for IFRS Implementation: The Tokyo Stock Exchange Survey
Subs, Functions and Event Procedures in Excel VBA
Pak Arab Refinery Limited (PARCO) – Management of Circular Debt
Kaiser Steel Corp.–1950
Corporate Restructuring and the Master Limited Partnership
Has LIBOR Lost Its Stature in Derivatives Markets?
