Court Clears Way for WCI to Proceed to Confirmation of Its Chapter 11 Plan

The Court's approval paves the way for WCI to begin soliciting votes to accept its Plan of Reorganization, which already enjoys the support of the steering committees for the Company's secured term and revolving lenders and the Official Committee of Unsecured Creditors. It is anticipated that Plan materials and ballots will be mailed by July 24, 2009. The deadline for returning ballots is August 19, 2009, in accordance with instructions in the Bankruptcy Court's order and on the ballots. A hearing to confirm the Plan is scheduled for August 26, 2009.

"We are very pleased to have cleared this important hurdle in our path toward exiting from chapter 11," said David L. Fry, Interim President and Chief Executive Officer. "With the voting process about to begin, and with the firm support of our primary constituencies, WCI is squarely on track to emerge from chapter 11 as a deleveraged lifestyle community developer and land holding company with the flexibility to navigate its business during these unprecedented times and beyond."

Under the Plan, it is anticipated that the Company's senior secured lenders will receive new first lien debt in the aggregate amount of $450 million, which includes a $150 million payment-in-kind (PIK) component and an initial 95% equity stake in the reorganized company. The remaining 5% would be shared by the Company's unsecured creditors. The unsecured creditors' share would begin to increase when the new debt is fully retired and would reach a maximum of 34% after the secured lenders have received payments that are equivalent to the amount currently owed to them (approximately $740 million).

The Plan also includes an agreement reached with the lead attorneys representing the Chinese drywall claimants. The terms of the agreement as described in the Plan provide for the creation of a Chinese Drywall Trust and allow the Chinese drywall claimants to pursue causes of action related to the manufacture and installation of defective imported drywall in their homes.

"Today marks an important step in WCI's restructuring. The Company and its secured lenders and the Official Committee of Unsecured Creditors have been able to work together to maximize value under extremely challenging circumstances and to ensure that recoveries are allocated fairly among the Company's stakeholders," said Thomas Lauria of White & Case, WCI's counsel in the Chapter 11 case. "This consensual resolution is a tribute to all involved, given that we had no agreement with any of our creditors when we commenced these cases just 11 months ago, and in light of the unprecedented events that have transpired since."

About WCI Communities

WCI is a fully integrated homebuilding and real estate services company with more than 50 years' experience in the design, construction and operation of leisure-oriented, amenity rich master-planned communities. It has operations in Florida, New York, New Jersey, Connecticut, Virginia and Maryland. The company directly employs approximately 1,170 people, as well as approximately 1,800 sales representatives as independent contractors.

Forward Looking Statement

Certain information included herein and in other company reports, Securities and Exchange Commission filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the company's ability to operate its business while in Chapter 11 proceedings, anticipated operating results, financial resources, ability to acquire land, ability to sell homes and properties, ability to deliver homes from backlog, and ability to secure materials and subcontractors. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other company reports, filings, statements and presentations. These risks and uncertainties include WCI's ability to compete as a going concern in real estate markets where we conduct business; WCI's ability to obtain court approval with respect to motions in the chapter 11 proceeding prosecuted by it from time to time; the ability of WCI to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for WCI to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; WCI's ability to obtain and maintain normal terms with vendors and service providers; WCI's ability to maintain contracts that are critical to its operations; the potential adverse impact of the chapter 11 cases on WCI's liquidity or results of operations; the ability of the WCI to fund and execute its business plan; the ability of WCI to attract, motivate and/or retain key executives and associates; WCI's ability to maintain or increase historical revenues and profit margins; WCI's ability to obtain necessary permits and approvals for the development of its lands; the availability of capital to WCI and our ability to effect growth strategies successfully; availability of labor and materials and material increases in insurance, labor and material costs; increases in interest rates and availability of mortgage financing; the ability of prospective residential buyers to obtain mortgage financing due to tightening credit markets, appraisal problems or other factors; increases in construction and homeowner insurance and availability of insurance, the continuing negative buyer sentiment and erosion of consumer confidence; the negative impact of claims for contract rescission including the impact of any Chinese drywall claims or lawsuits by contract purchasers; adverse legislation or regulations; adverse legal proceedings; the ability to retain employees; changes in generally accepted accounting principles; natural disasters; adverse weather conditions; and changes in general economic, real estate and business conditions and other factors over which the company has little or no control. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then the company's actual results, performance or achievements could differ materially from those expressed in, or implied by the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This statement is provided as permitted by the Private Securities Litigation Reform Act of 1995.

SOURCE: WCI Communities, Inc.

Sitrick And Company 
Sandra Sternberg 
Maya Pogoda 
310-788-2850