American Homebuilders Files for Bankruptcy

15 07 2009

One of the largest Jacksonville-based homebuilders, American Homebuilders Inc. filed for Chapter 11 Bankruptcy on June 10.

The company’s owner, Mitch Montgomery, filed for bankruptcy relief for the company in the U.S. Bankruptcy Court for the Middle District of Florida. The board elected law firm Berger Singerman P.A. as its bankruptcy counsel.

In a separate filing, Montgomery and American Homebuilders filed a motion seeking a restraining order and relief from existing suits with creditors to prevent them from going after Montgomery’s personal guarantees. There is a hearing scheduled Wednesday to address the motion.

The creditors include Branch Banking & Trust Co., Bank of America, Wachovia Bank NA and Regions Bank. BB&T stated in the bankruptcy filing that the company’s mortgage debt to the bank is more than $17.5 million. In another suite, BB&T is seeking to foreclose on American Homebuilders’ mortgage lien of about 65 undeveloped lots and 12 vacant speculative houses in Jacksonville including in Nocatee and Amelia National.

Montgomery said in a phone interview that he has only been a “passive” investor in the company since it was founded in 1992, lending the owners equity money for capital expenses and had no active role in the company’s operation. He said the president of the company, Craig Scott, and the construction vice president, Don Halil, operated the company until they resigned in 2008, leaving him in charge “to work through this crisis on his own.”

Even before Scott and Halil left Montgomery owned 51 percent of the company and since their departure and their relinquishment of shares, he is now the sole shareholder.

Montgomery said he didn’t shutter the company last year when Scott and Halil left because there were still homes and lots in the company’s inventory. Still, he claims in the filings that he is owed $4.4 million in principal and $561,253 in interest from the company.

The phone number to American Homebuilders has been disconnected and neither Scott nor Halil could be reached immediately for comment.

American Homebuilders was formed in 1992 and reached gross receipts of $40 million in the real estate boom in 2005, according to court filings. “During the crash of the real estate market starting in 2006, the sales of lots and homes dried up virtually over night and these market conditions have left AHB without sufficient sales to continue to meet its debt obligations,” the company stated in its injunction request.

In the initial Chapter 11 filing, Montgomery listed estimated assets and liabilities each between more than $10 million to $50 million.

Source: Jacksonville Business Journal

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