Homebuilding giant D.R. Horton has paid its founder’s children millions of dollars to buy land to develop over the last two years.
Federal securities filings reviewed by Bloomberg show that the Texas-based company purchased $8-million-dollars-worth of land from companies led by the two sons of Donald R. Horton and that is has agreements to pay $114 million more for properties they own.
The filings note that a compliance officer with the publicly traded company and independent directors reviewed some of the sales and the company said its disclosures were appropriate.
In three instances, the elder Horton lent money to his sons to buy land that Horton later agreed to buy.
In the largest deal, the elder Horton lent $77.5 million to a company owned by his sons to buy 119 acres in Arizona. D.R. Horton then agreed to a pay an annualized return of 16 percent to the company for an option to buy the land.
Based on a company timeline to buy the land, the sons would take in around $7 million from a sale planned this fall. The filings do not indicate if the deal was reviewed.
D.R. Horton is one of the country’s largest homebuilders and is active across the country. It recently purchased large tracts of land in Miami.
The filings don’t indicate how those deals were made and whether or not D.R. Horton got the best deal possible. Donald Horton told Bloomberg that his sons did the deal “cheaper than other people would.” [Bloomberg] – Dennis Lynch