Loriann
05-12-2006, 06:53 AM
*Note..I was not sure which forum to post this, so I sent it to Corporations also.
#1 Today, 05:35 AM
Loriann
Junior Member Join Date: Oct 2005
Posts: 7
Help! My builder filed Chapter 11!!!
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Hello. I am in the process of building a new home in Spring Hill, Florida.
We signed a contract with Coral Bay Construction Inc. in October of 2004. We took out a construction loan with Suntrust Bank to finance the home at and the draws that Coral Bay took so far are $53,000. Every month, we pay interest on what he draws, at the prime rate.
We are maybe 40% complete. We have slab, block, roof, frame, partial insulation, rough plumbing and rough electric.
We own the land that we are building on outright--we bought it before we contracted with Coral Bay, for cash.
Well, 19 months later, Coral Bay decided to file Chapter 11 Bankruptcy.
It turns out, as suspected by the 100+ people he was building houses for,that he was in over his head. He may have misappropriated funds (using the clients money to pay for his huge, fancy trucks, boats, cars, lavish trips to the bahamas, his mansion ,the list goes on and on..).I, as the other clients of his, have various liens on our homes that we will be responsible to pay. It is my understanding that in this state, the supplier or sub contractor (electrician, plumber, HVAC etc.) can not only go after the General Contractor (Coral Bay) but after the homeowner as well.
Now, I went to an attorney yesterday that told me basically, there is nothing I can do. In fact, if I am released from Coral Bay's contract, even if Coral Bay chooses to release me, I will be responsible for all liens, and it is highly probable that Coral Bay will turn around and sue me for Loss of Profit and breach of contract! Is this possible?
The problem is, I cannot have another builder complete my home if Coral Bay does not release me.
My questions:
How does Coral Bay filing Chapter 11 affect me?
Does Coral Bay have to release me, or is that up to the Bankruptcy Court now?
Will I and the other clients Coral Bay left with incomplete homes be given notice as to when his Bankruptcy hearing is, and if so, can we attend and speak to the judge?
Will I have to pay the liens from the sub contractors if I am forced to continue building with Coral Bay, or will Coral Bay, due to his Bankruptcy filing, settle with them for pennies on the dollar and I will be left to pick up the difference?
Also, the County was well aware of Coral Bay's situation of having too many contracts, and not finishing enough houses. Yet, the county still continued to issue them permit upon permit--making a hefty profit as well.
Are we all just out of luck? Is the county responsible? The State Attorney General? Coral Bay?
Most of us are transplants from the North. We are used to dealing with regulations. We realize Florida is one of the most relaxed states as far as regulations go, but the majority of us, between the interest and rent we have been paying while patiently awaiting the completion of our house is driving us into the poor house, or making us dig into our retirement savings, or forcing us to continue working.
What can we do??? Any insight will be greatly appreciated!!!! Thanks!
#1 Today, 05:35 AM
Loriann
Junior Member Join Date: Oct 2005
Posts: 7
Help! My builder filed Chapter 11!!!
--------------------------------------------------------------------------------
Hello. I am in the process of building a new home in Spring Hill, Florida.
We signed a contract with Coral Bay Construction Inc. in October of 2004. We took out a construction loan with Suntrust Bank to finance the home at and the draws that Coral Bay took so far are $53,000. Every month, we pay interest on what he draws, at the prime rate.
We are maybe 40% complete. We have slab, block, roof, frame, partial insulation, rough plumbing and rough electric.
We own the land that we are building on outright--we bought it before we contracted with Coral Bay, for cash.
Well, 19 months later, Coral Bay decided to file Chapter 11 Bankruptcy.
It turns out, as suspected by the 100+ people he was building houses for,that he was in over his head. He may have misappropriated funds (using the clients money to pay for his huge, fancy trucks, boats, cars, lavish trips to the bahamas, his mansion ,the list goes on and on..).I, as the other clients of his, have various liens on our homes that we will be responsible to pay. It is my understanding that in this state, the supplier or sub contractor (electrician, plumber, HVAC etc.) can not only go after the General Contractor (Coral Bay) but after the homeowner as well.
Now, I went to an attorney yesterday that told me basically, there is nothing I can do. In fact, if I am released from Coral Bay's contract, even if Coral Bay chooses to release me, I will be responsible for all liens, and it is highly probable that Coral Bay will turn around and sue me for Loss of Profit and breach of contract! Is this possible?
The problem is, I cannot have another builder complete my home if Coral Bay does not release me.
My questions:
How does Coral Bay filing Chapter 11 affect me?
Does Coral Bay have to release me, or is that up to the Bankruptcy Court now?
Will I and the other clients Coral Bay left with incomplete homes be given notice as to when his Bankruptcy hearing is, and if so, can we attend and speak to the judge?
Will I have to pay the liens from the sub contractors if I am forced to continue building with Coral Bay, or will Coral Bay, due to his Bankruptcy filing, settle with them for pennies on the dollar and I will be left to pick up the difference?
Also, the County was well aware of Coral Bay's situation of having too many contracts, and not finishing enough houses. Yet, the county still continued to issue them permit upon permit--making a hefty profit as well.
Are we all just out of luck? Is the county responsible? The State Attorney General? Coral Bay?
Most of us are transplants from the North. We are used to dealing with regulations. We realize Florida is one of the most relaxed states as far as regulations go, but the majority of us, between the interest and rent we have been paying while patiently awaiting the completion of our house is driving us into the poor house, or making us dig into our retirement savings, or forcing us to continue working.
What can we do??? Any insight will be greatly appreciated!!!! Thanks!
