Tousa took out several loans to pay it off, using its more than 30 subsidiaries' assets as guarantees, but by January 2008, the companies had filed for Chapter 11 protection. Transeastern sued, claiming its partner had defaulted on its obligations, and the two sides came to a $421 million settlement in 2007. Tousa borrowed heavily to make the venture work, but it was crippled by the housing crisis, according to court records. Tousa also noted that it was embroiled in "intense and prolonged" litigation that eventually made it to the Eleventh Circuit over a 2005 prepetition joint venture with Transeastern Properties Inc. prospects for an operation turnaround were thwarted in the face of economic conditions that continue to worsen." "While the debtors made great effort to weather the economic storm and stabilize their businesses. "In the end, the prolonged and ongoing decline in the home building industry, which preceded and continued through what has become known as the 'Great Recession,' proved too difficult to overcome," the motion said. The homebuilder said that its Chapter 11 proceedings have been going forward as the housing industry, as well as the wider economy, have been facing "substantial and sustained" doldrums since the subprime mortgage crisis hit, with the downturn being especially steep in Florida. The company filed a joint motion with the creditors committee in the case for the disclosure statement's approval, which would allow Tousa to start soliciting creditors' votes. on Thursday asked a Florida bankruptcy court to approve the disclosure statement for its liquidation plan, saying it has abandoned any hope of reorganization after enduring ongoing litigation and a difficult housing market.
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