TAMPA - Luxury home builder WCI Communities Inc., which has a large project in Tampa, filed for Chapter 11 bankruptcy protection this morning.

This comes after the Bonita Springs-based company failed to obtain new financing and some holders of $125 million convertible notes insisted last week on being paid in cash in August.

The bankruptcy documents were filed in U.S. Bankruptcy Court in the District of Delaware.

As part of the restructuring, Chief Executive Officer Jerry Starkey will leave the company and David Fry will serve as interim CEO, WCI says today in a written statement.

"The company, with all diligence, has attempted to avoid a bankruptcy filing," the company's chairman, billionaire investor Carl Icahn, says in the written statement.

"However, the filing became necessary because of the recent failed effort to obtain financing and the recognition that the company's entire $1.8 billion of debt may soon be in default."

In a Chapter 11 filing, companies can reorganize debt and other obligations with an eye toward emerging in better financial shape.

Shares tumbled almost 50 percent in morning trading, falling 60 cents, to 66 cents. They traded as high as $10 a share during the past 52 weeks.

Locally, WCI Communities is known mostly for developing Sun City Center in southern Hillsborough County. Another project, Westshore Yacht Club, overlooking Tampa Bay in South Tampa, is under construction.

It was not immediately clear how the bankruptcy will affect Westshore Yacht Club.

In November, the developer said construction was on hold until the real estate market improved.

Westshore Yacht Club is on 74 acres and initially included plans for 539 homes. One of three planned towers is complete. At least 60 percent of the single-family homes and town homes planned for the project are complete.

Before the filing, the company reached a definitive agreement with its principal secured lenders regarding the terms on which the company will have access to more than $50 million cash to continue operating its business.

The company, which began developing master-planned communities in 1946, said it will continue to sell, build and deliver homes.

WCI has properties in Florida, Connecticut, Maryland, New Jersey, New York and Virginia.

Reporter Shannon Behnken can be reached at               (813) 259-7804        or sbehnken@tampatrib.com.