European Stars and Stripes (Newspaper) - September 9, 1990, Darmstadt, Hesse                                Page 14 a the stars and stripes sunday september 9,1990 business new sgd offering lot swaps to buyers by Randy Mcclain financial writer Genera development corp., the troubled Florida real estate giant has unveiled part of a plan in . Bankruptcy court in Miami that it says will guarantee delivery of ready to build on Home Sites to most customers. The plan which is still being reviewed by gds creditors would offer discounts of at least 5 percent to All customers who continue paying monthly instalments toward the Purchase of residential lots. The plan also contains a provision that would allow owners of undeveloped lots a that is property without All roads sewer lines and electric service put in a to Swap their land for a developed Home site in the same or a comparable gds Community go cd a customers include hundreds of gis in Europe who signed contracts to buy lots in Florida on time payment plans. Many Are continuing to mail in checks every month to Honor their contracts despite the fact that gds filed for chapter 11 bankruptcy in Early april and its ability to fully develop unfinished Home Sites remains very much in doubt. Complicating matters even further is the fact that gds also faces criminal charges in Federal court in Miami. Company officials Are accused of Selling Homes throughout Florida at inflated prices based on phony appraisals that were arranged by a company subsidiary. Federal prosecutors claim the scheme took place from 1983 to 1989. The criminal proceedings Deal Only with fraudulent Home sales however not lot sales. Doug Lyons a Miami attorney who represents 70,000 gds customers in bankruptcy court said last week that lot buyers should be sceptical of the company a latest offer. A look before you leap. Done to get burned twice a he said. Lyons said participating in a lot Swap May be the Only Way thousands of customers will get a Home site they can use. But he said people should be careful and have the land they re buying appraised before paying More Money. Gds has routinely sold Home Sites in Florida for up to 1,000 percent above fair Market value he said and Many customers May find it smarter to simply Stop paying the company a wildly inflated prices rather than throwing Good Money after bad. Lyons said the discounts off contract prices that gds officials Are Likely to offer May not be enough to compensate for the Steep prices customers agreed to pay initially. Some customers probably should just forget about moving to Florida and instead file a claim in bankruptcy court to recover what they be already paid he said. Claims against gds must be filed in bankruptcy court no later than dec. 10, 1990, by order of the judge presiding Over the Case the attorney added. Seeking recovery of damages via bankruptcy court is no sure thing though. Lot owners who think they were overcharged for property will have to stand in line with hundreds of other creditors seeking Money from gds. Depending on what Type of chapter 11 reorganization plan is hammered out in court go cd a creditors May receive Only pennies on the Dollar. For their part gds officials say the company a new lot Swap program is a a vital part of its reorganization Effort and a Chance to provide a stable financial base. Gds spokesman Otis Wragg said in a news release that the firm s Quot Home site Assurance plan represents a two pronged attack designed to restore customer Confidence in gds. For approximately 54,600 people with contracts for fully developed residential lots the Home site plan focuses on guaranteeing delivery of the property As promised and offering financial incentives to effectively reduce a customers Purchase Price. For another 35,300 contract holders who Are making payments on undeveloped lots the plan includes the same feeding assurances promises of discounts and a lot Swap component. Here show the lot Swap program would work. Keep in mind though that some of the details Haven to been filled in yet by gds and the whole plan needs the bankruptcy courts of. Gds maintains that it has 13,000 unsold but developed lots in its inventory to which customers who own undeveloped lots could switch. Wragg said gds customers would be notified of their right to participate in the program by Telephone or mail once court approval is secured. Financial incentives to encourage customers to keep making monthly payments on their land will be based on a sliding scale tied to a lots original Purchase Price. A the precise formula for the reduction is still being discussed with various creditor groups a Wragg said. A but it is anticipated that the minimum reduction would be 5 percent and increase in relationship to higher original Selling  the lot Swap aspect of go cd a proposal is designed to reduce the company a ongoing development costs. Lyons said it would Cost $400 million if gds had to deliver a lot Complete with roads sewer lines and electric service to every customer paying for one. But for the current fiscal year the firm has budgeted a Mere $4 million for lot development costs. A at that rate it does no to take a rocket scientist to figure out it would take gds 100 years to meet its obligations a Lyons added. But gds officials say the lot Swap program will keep their development obligations to a manageable level. A for purchasers with contracts on undeveloped lots gds will give preference in the lot Matching process to the More senior accounts a Wragg said. That Means customers who have paid the most Money toward Purchase of their lots will be the first allowed to Swap for a ready to build on Home site in the same or another gds Community. Customers who have paid in full for land and those who will finish paying within six months from the programs Start would be included in the first notification group. A the remaining purchasers of undeveloped lots will be grouped within ranges of percent paid and notified in subsequent Waves a Wragg said in the gds news release. Since gds has identified Only 13,000 unsold and fully developed Home Sites for its lot Swap initiative that Means thousands of other contract holders who think they re entitled to a Home site will probably have to be dealt with in some other fashion. Gds officials however believe that contract cancellations will take care of some of the problem. And if still More lots Are necessary to meet greater than anticipated demand gds has proposed additional lot development at the lowest possible marginal Cost to the company the firms news release said. Lyons said go cd Slot Swap plan is in a a skeletal form at this stage and he said customers should be careful before jumping at the bait. A we done to know what communities Are being swapped out of and into what lots Are involved and what the discounts will be a the property owners lawyer said. Customers also should make sure that land gds claims is ready for a Home to be constructed on it is really a Bui liable by Community standards a Lyons said. A if you decide to go ahead and buy the lot make sure it is improved and does no to have washed out Bridges leading to it or Trees growing in the Middle of the  some gds subdivisions Are overgrown with weeds from years of neglect the company a critics say and the property would need a massive clean up to be ready for Home construction. A people should take the time to investigate a Lyons said. Only customers who finish paying for their land will be Able to take Possession of it or participate in the proposed lot Swap Lyons said. The Best bet for others including customers who no longer have Faith that gds can deliver what it promises is to Stop sending the firm Money every month and seek reimbursement for what has already been paid via bankruptcy court he said. Another option is to continue paying on a Home site while getting it appraised by a real estate appraiser in Florida. If the land turns out to be Worth less than the amount a customer still has left to pay the buyer should Stop mailing in checks and file a court claim against gds Lyons said. If the land is appraised at a level greater than or equal to the amount still owed it s probably Wise to go ahead with the Purchase the attorney advised. Amp sponsored by Chrysler military sales corps Mountain Bike  Kippel Bach ski area 16 september 1990open to All . Id card holders 18 years and up local nationals 18 years and  a men s open 18-39 yrs. A women s open 18 and up. A men s masters 40 and up. A recreational rider category race begins 11 00 am registration a pre registration until 14 sept $10 or do 20�?� on site 8-10 am $15 or do 30 this terrain is very challenging a recreational rider category for further information Contact Wil Flecken outdoor recreation ets 326-3449 advertising appearing on his Page is not endorsed by the department of defense the military departments or the stars and stripes