May 21, 2012
Within days of shuttering its Colorado Springs operations, the Canadian parent company of Todays Homes sought protection from its creditors in Calgary, records show.
On May 9, Robert Friesen, chairman and founder of Unity Builders Group, filed an affidavit seeking court protection from creditors for debts totalling more than $258 million Canadian.
In a list of debts that accompanied court filings, Unity said it owed $177.3 million to secured creditors; that figure included $3.7 million owed to PNC Bank of Atlanta for loans related to Unity’s Colorado Springs’ projects, records show.
Meanwhile, a list of $81.6 million in unsecured creditors includes $342,457.88 owed to 27 Springs-area businesses, subcontractors, homeowner groups, professional associations and local governments. However, there appeared to be no local homeowners on the list.
Tops among the Springs-area unsecured creditors on the list: PTL Concrete of Colorado Springs is owed $59,015.45. Among others, Colorado Springs Utilities is owed $41,463.21; the Pikes Peak Regional Building Department is owed $2,675.67; and the Housing and Building Association of Colorado Springs is owed $1,128.40.
The court filing by Unity Builders Group is the latest twist in the May 4 closing of its Todays Homes operation in the Springs. At the time, Todays Homes laid off all of its local employees, leaving several dozen prospective homebuyers wondering where their deposits are, and also leaving the fate of a trio of too-tall townhomes the company had promised to move up in the air. Several local subcontractors have filed liens against the company’s local properties.
Former Todays Homes employees have since referred calls to Unity Builders Group CEO Tom Chisholm, who has not returned repeated phone calls.
John and Robin Haehn had put $21,500 down on a Todays Home house in Banning Lewis Ranch on the east side of Colorado Springs just days before the company shut down. The Haehns retained an attorney, who spoke with Chisholm on Friday and was assured everything would be put right, John Haehn said.
“We kind of had our hopes up that we were still going to get our house,” Haehn said Monday. After learning of Unity’s debt woes, he said, “I just don’t know if we can buy it now.”
Chiddix Bros. Inc. of Peyton, northeast of Colorado Springs, is owed $41,265.48 by Unity for excavation and utility work it did for Todays Homes, according to the court documents.
Owner and president Colleen Chiddix said she received a letter Monday alerting her company to the Unity Builders’ court filing in Canada. Even before the letter, and upon learning that Todays Homes ceased operations earlier this month, Chiddix said her attorney filed liens against properties Chiddix Bros. worked on in hopes of protecting itself and recouping money it’s owed.
It’s the second time in the last few years the 16-year-old Chiddix Bros. has been caught up in a builder’s financial woes; Chiddix said her company never received about $50,000 it was owed by John Laing Homes after the California-based builder filed for bankruptcy protection in 2009.
Not only did Chiddix Bros. never receive the $50,000, but it was required under federal bankruptcy law to return about $27,000 in payments it had received from John Laing in the 90 days before the builder’s bankruptcy filing, Colleen Chiddix said.
In addition to the money it’s owed by Todays Homes, Chiddix said she fears she also might have to return a five-figure payment Chiddix Bros. received in the last 90 days from the now-shuttered homebuilder.
If it does, and if Chiddix doesn’t receive the $41,000-plus, the company will survive, Colleen Chiddix said. Todays Homes accounted for about 10 percent of Chiddix Bros.’ local work, and the company has a good relationship with other area homebuilders who are doing well, she said.
“We’ll be OK,” Chiddix said. “It stings. But it’s not a death blow like John Laing Homes was almost a death blow.”
According to an article in the Calgary Herald, Unity Builders was facing a liquidity crisis as the housing bust dried up sales of its luxury properties in both Canada and the United States.
Unity Builders is seeking protection under the Canadian Companies’ Creditors Arrangement Act; the act allows a troubled company to restructure its financial affairs short of a bankruptcy, according to the website of PricewaterhouseCoopers LLP Canada, an arm of the international accounting firm. An application filed by the company under this act was heard by a Canadian judge May 9. A U.S. bankruptcy filing for Todays Homes could not be found.
In the filing, Unity Builders said its “U.S.A. division currently has little work underway and has proven to be unprofitable. It is UBG’s intention to wind up these operations as soon as possible, without pursuing any formal restructuring of this division.” What that means for local buyers, contractors and residents of partially completed projects is unclear.
The city and the Pikes Peak Regional Building Department are reviewing what recourse they could have against Todays Homes, officials said.
Hollis Glenn, investigations and compliance officer for the Colorado Division of Real Estate, said he had received calls about the company after stories in The Gazette, but that it was unclear if his office had jurisdiction in the matter, since some developers accept down payments but don’t act as real estate agents. Glenn said he is not permitted to say whether the division has opened an investigation. The Colorado Attorney General’s Office could also investigate what happened to the down payments, he said.
Contact Andrew Wineke: 636-0275 Twitter @awineke
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