The Five Dumbest Things on Wall Street This Week

5. Tousa Tumble

Tousa (TOA Quote) is looking like a teardown.

The Hollywood, Fla., homebuilder hired Kroll Zolfo Cooper to help Tousa's management in "developing a long-term business plan and assist Tousa in evaluating its restructuring options."

Evaluating Tousa's options shouldn't take all that long. As TheStreet.com's Mark DeCambre reported last month, Tousa's creditors have hired law firm Akin Gump to assess their rights in the event of a bankruptcy filing. Tousa hasn't officially sought Chapter 11 protection, but just last month it withdrew its 2007 and 2008 financial guidance, citing "worsening market conditions impacting the new home industry."

Also impacting Tousa is its huge debt load. A 95% drop in the stock price over the past year has left the company with a stock market value of just $29 million. Yet the company carries more than $1 billion in debt. Tousa is so concerned about this imbalance that last month it hired another adviser, Lazard Freres, "to conduct a comprehensive review of Tousa's capital structure."

Tousa's move this week suggests the findings of that review weren't terribly upbeat. Kroll Zolfo's client list, after all, is populated largely by companies that have ended up in bankruptcy court.

Not that Kroll Zolfo wants to play that up, of course. The firm says on its Web site that "our professionals specialize in creating business solutions that deliver results."

Unlike the losers who have run Tousa into the ground.

Dumb-o-Meter score: 80. "By retaining Lazard, we are broadening our perspectives on our asset management initiatives, as well as examining our capital structure for a longer-term solution to enhance Tousa's value for its stakeholders," the company said last month.