A Delaware Bankruptcy Court has approved WCI Communities’ reorganization plan.

The approval comes a little more than a year after the Bonita Springs-based luxury homebuilder filed for Chapter 11.

Under the plan, which was filed in June and supported by WCI’s senior secured lenders and official creditors committee, WCI will eliminate more than $2 billion of debt and liabilities from its balance sheet, the company said in a news release.

WCI said it expects to emerge from bankruptcy on Aug. 31.

The plan calls for the company’s senior secured lenders to receive $450 million of new debt and an initial 95 percent equity stake in WCI. Unsecured creditors will receive interests in a litigation trust and an initial 5 percent equity stake that could increase to as much as 35 percent depending on future operations. All existing shares in the company are being cancelled and will receive no recovery.

David L. Fry, who has been with WCI since 1995, will continue to serve as president and CEO of the reorganized company.

“WCI, along with its major constituent groups, have worked together to fashion a plan that allows us to emerge as a deleveraged lifestyle community developer and land holding company and ensures that recoveries are allocated fairly among the company’s stakeholders,” Fry said in a statement.

Last month, a bankruptcy judge approved revisions to the original plan to include a trust account for claims against insurers or suppliers regarding defective Chinese drywall.

In January, WCI said in an SEC filing that it was setting aside $11 million for homes that needed air conditioning coil replacement, “which may or may not be related to the Chinese drywall.”

http://www.bizjournals.com/southflorida/stories/2009/08/24/daily54.html