Lennar CEO Lies About Losses in Joint Venture

Lennar Corporation (NYSE:LEN) CEO Stuart Miller was on CNBC on Friday to “respond” to allegations made by Barry Minkow and Fraud Discovery Institute about the company’s propensity for fraud. In the process of trying to diminish the impact of the serious allegations, Miller got caught in a blatant lie.

One of the allegations made in FDI’s original report on Lennar is that the company profits from cheating joint venture partners out of the money due to them. Minkow specifically named the LandSource venture (a project now in bankruptcy) as an instance in which Lennar profited while the other parties came out big losers.

Miller said the following during the interview:

That deal has been vetted both in the press and it’s been looked at pretty carefully. The fact is it’s a premier parcel of land that has gotten caught up in the market downturn that I don’t think anybody predicted would be as severe as it’s been. At the end of the day it’s a venture where all venture partners lost – and, have lost – and we continue to try to find ways to maximize value in a venture that is today in bankruptcy, as you noted.

Lost? Really? All partners? Because that’s not what Miller was saying in 2007 when Lennar was profiting handsomely from the LandSource project.

According to a February 28, 2007 press release from Lennar (emphasis mine):

Lennar Corporation (NYSE: LEN and LEN.B), one of the nation’s largest homebuilders, announced today the addition of a new strategic partner, MW Housing Partners (“MWHP”), into its LandSource joint venture. MWHP adds significant financial resources and unique land positions to a venture already recognized as a premier land and development company. The completion of the financing and transaction resulted in a cash distribution to Lennar of approximately $700 million. The resulting ownership of LandSource is 68% MWHP, 16% Lennar and 16% LNR Property Corporation. Lennar will retain a promote opportunity allowing it to have a disproportionate share of the entity’s future positive net cash flow. In the first quarter of fiscal-year 2007, Lennar will recognize approximately $170 million of earnings and, potentially, $400 million in future years.

Even more interesting is that Miller himself profited handsomely from this deal too. LNR, a sister corporation to Lennar, also received $700 million. Miller owns over 20% of LNR, and if my math is right, that means that his personal share of LNR’s profits on this deal were about $140 million.

The public record is clear. Lennar had a very nice payday from LandSource.  And Miller blatantly lied about it on CNBC.


  1. Pingback: More proof of Lennar lies | Sequence Inc. Fraud Files Blog

  2. vincent

    Anyone here know about Mulberry at Bressi Ranch Project? Mulberry project is very bad design and poorly build. If anyone have information about any Mulberry project, please email me.

  3. vincent

    The Mulberry condominium at Bressi Ranch Project is city of Carlsbad working with Lennar corporation to help “low income” housing project. But it’s poorly build and have lot of issues with architectural design flaw. And I have spoken to Mr. Foss who in charge of city of carlsbad building code department, things that city of Carlsbad cove up the Lennar’s design flaw. I wound when government agencies truly help residence of Mulberry which poorly build.
    Here is the issues:
    1) If you own the up units of Mulberry, it will be very hot in all the rooms during the summer, because the heat insulations (roof) is cheaply build.
    2) If you own the down units of Mulberry, you can hear the upstairs shower, walking and laundry machine running. The up and down units of insulations is poorly build.
    3) If you own the down units of Mulberry, you can not sleep because you will have 3 AC units next to your bedroom. each of AC units will produce noise of 67.6 dB and the AC units is up residence.
    4) If you own the up units of Mulberry or down units of Mulberry, both units get noise pollution from cross building AC units which located in hall way by 3 walls, and the AC unit noise just like the jet airplane. (noise level over 86 dB).
    5) The “best” of that, HOA (Walter Management), City of Carlsbad (building code department), and Lennar do not care. Lennar’s greed (cheap build project with design flaw) with help of city of Carlsbad’s bureaucracy and useless of HOA (Walter Management), I am here 3:10am can not sleep due to AC unit next to my bedroom window to write the the blog.

    Residence of cheap build project-Mulberry build by cheap company Lennar

  4. nolan

    our company worked for lennar for many years ..lennar had a habit of asking for low low prices based on vol…then went to the subcontractors and ask (demanded) for cuts in priceing ..when the cuts came so did the cuts in quality roofers putting 2 nails per shingles brick layers useing half the motar mix..framers useing half the nails and the list goes on and on i would not let lennar build me a doghouse

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