The president of Hansen & Horn Group Inc. admitted in court Thursday that the troubled home builder is insolvent and
agreed to have a receiver appointed to operate the Indianapolis-based company.
Judge Heather A. Welch of Marion Superior Court 12 is scheduled to name a receiver at a Dec. 10 hearing.
It remains unclear, however, whether the financially pressed home builder can continue to operate, or whether it will file bankruptcy. But Ward Horn said he remains optimistic.
“We’ve got a great track record working with contractors and suppliers, and we’re going to continue to do that,” he said following the court proceedings.
Horn appeared in court following an effort by one of its suppliers, Indianapolis-based C&R Concrete Inc., to have Hansen & Horn placed in receivership.
C&R Concrete filed suit against the company and is seeking to recover $268,749 in concrete work done during the past three years.
All told, the home builder is facing at least 20 lawsuits brought mostly by subcontractors hoping to recover more than $1 million.
Eric Allen, a lawyer for C&R Concrete, is pleased with the judge’s decision.
“We’re very happy with the outcome,” he said. “It’s what should have happened a long time ago.”
Hansen & Horn’s financial pressures have mounted in recent weeks following another lawsuit, in which its lender, Monroe Bank, was ordered to place a 90-day hold on its account after the company failed to pay a $183,000 judgment.
A hearing on that matter is set for Jan. 26.
Indianapolis-based Lee Supply Corp. sued the homebuilder after it failed to pay for materials and services, according to court documents. Hansen & Horn, meanwhile, attempted to have the lawsuit dismissed, a legal maneuver that the judge rejected Nov. 3.
Horn’s testimony on Thursday revealed he is president of two related companies, which further muddied the receivership proceedings. Hansen & Horn Group Inc. was founded in 1977 and has built homes under the moniker ever since.
But as its financial troubles worsened, he formed Hansen & Horn Inc. in January, to give Monroe Bank additional security. According to Ward Horn's testimony, the documents to form the new company, through which the loans flowed, required the signatures of his wife and the wife of his son, Steve, the company’s chief operating officer.
The loans flowed from Hansen & Horn Inc. directly to Hansen & Horn Group Inc.
C&R Concrete, meanwhile, quit working for Hansen & Horn in September after the home builder directed C&R Concrete’s bookkeeper to cash its checks only after receiving approval first. That approval never came, said Richard Grant, C&R Concrete’s owner.
“Everything I was told turned out to be a lie or false information,” said Grant, while admitting he thinks Hansen & Horn builds quality houses. “I felt like myself and other people have been given the runaround. Where do you stop at.”
Hansen & Horn’s attorneys, James Ammeen and Barbara Malone, had requested the receivership hearing be continued, but the request was denied by Welch.
The company’s previous counsel, Raymond Basile and Paul Carroll of the local Harrison & Moberly LLP firm, notified Marion County courts on Monday that they were withdrawing as company representatives.
Hansen & Horn is building in more than 20 subdivisions in central Indiana, including Duke Realty Corp.’s mixed-use Anson development in Boone County near Whitestown. It replaced Los Angeles-based KB Home Inc., which backed out of plans to build in Anson when it exited the Indiana market in July 2007.
The company has regularly ranked among the top residential construction companies in the Indianapolis area over the past decade, building more than 200 homes during several of those years.