Home builder Lennar Corp is in some serious trouble. Lannar homesis accused of tricking California's pension fund and others in a partnership to develop a 21,000 home community at Newhall Ranch.
LandSource Communities Development went bankrupt two years ago and CalPERS ended up losing $922 million. According to Associated Press:
- A lawsuite was filed last month in Delaware accuses Lannar and affiliates of misleading them during their partnership.
- It is alleged that Lennar designed a transaction in which they cased in on $1.4 billion in debt they knew they would never be able to repay.
- The lawsuit names the affiliates (LNR affiliates as defendants, and does not name Lannar specifically.
- The lawsuit was filed on behalf of the creditors in LandSource Communities LLC's bankruptcy proceedings.
- The creditors do not include the California retirement fund.
According to the Sacramento Bee:
- It is one of the worst investments for CalPERS (California Public Employees' Retirement System and its investments partners were a victims of fraud.
It is seriour that Lennar Corp finds itself accused of fraud it will be real trouble for the company.
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