The odds are getting even slimmer that creditors will recover any money owed to them by bankrupt home builder Hansen &
Horn Group Inc.
Court-appointed Trustee Thomas Krudy earlier this month requested a bankruptcy court judge in Indianapolis dismiss the Chapter 7 filing because the company appears to not even have the funds available to pay a lawyer to prepare necessary paperwork.
A hearing on the matter is set for July 15.
Marion Superior Court Judge Heather Welch approved the involuntary liquidation of Hansen & Horn in March, which allowed a court-appointed receiver to proceed with selling the Indianapolis-based home builder’s assets to satisfy its debts.
What, if any, assets have been sold is unclear. Receiver Rick Lux didn’t return phone calls to IBJ, and Hansen & Horn’s one-time attorney, James Ammeen, has withdrawn as its counsel, according to court documents.
“Apparently, Hansen & Horn is not stepping forward and is not able to prepare [bankruptcy] schedules,” Krudy told IBJ. “This [motion] was a move on my part to force that issue.”
Creditors can pursue claims against Hansen & Horn through litigation, but that seems to be a long shot as well, said Chris Kaiser, general manager of Indianapolis-based T.A. Kaiser Heating & Air Inc., a subcontractor that Hansen & Horn owes $150,000.
“What are you really going to chase?” Kaiser asked. “There’s nothing there.”
Stanley Feldman, owner of Indianapolis' Best Flooring Inc., concurred.
“We never did think we were going to get any money,” Feldman said. “They were down to nothing.”
Hansen & Horn is facing at least 20 claims brought mostly by local subcontractors hoping to recover more than $1 million.
A lawsuit brought by C&R Concrete, one of dozens of unsecured creditors owed money, prompted Hansen & Horn’s slide into bankruptcy. C&R is seeking to recover $268,749 for concrete work done during the past three years.
Other creditors, however, are taking a different approach to try to collect money they say they are owed.
Instead of suing the company, a lawyer for Dr. Nedra Soltow, a would-be homeowner who also is a physician at the Roudebush VA Medical Center, has filed suit against Ward Horn and Steve Horn, the father-and-son duo that operated the home builder. According to the lawsuit, Soltow agreed in February 2009 to pay Hansen & Horn $309,928 to build a home on her property. The money, paid up front, was to be placed in an escrow account.
Construction began, but after several delays Soltow learned in July that the escrow account only contained $130,068.86, not enough to finish the home, according to court documents.
Her lawyer, E. Scott Treadway at Indianapolis firm Stewart & Irwin PC, said another home builder since has been hired to finish the project.
“We are going after them individually,” Treadway said. “The damages we seek are the costs to complete the home and repairs to construction, attorney fees and punitive damages.”
Meanwhile, 50 home lots Hansen & Horn had purchased to build houses on will be available at a sheriff’s sale slated for Aug. 18. The lots are in developments spread across Hamilton, Hancock, Hendricks, Johnson and Marion counties.
Hansen & Horn bought the land using a line of credit issued by Salin Bank & Trust Co., which is owed $1.5 million on the loans, according to court documents.
The locally based bank argued successfully to have the home lots removed from the receivership, so Salin can have more control over their sale. The bank is expected to be the lone bidder interested in the land, because it’s worth less than what is owed.
“Normally, what happens is, the bank ends up being the buyer,” said Salin spokesman Roger Harvey, a principal at Bose Public Affairs Group. “Then [the bank’s] got to go figure out if there is a developer or builder interested.”
Hansen & Horn has stopped building in more than 20 subdivisions in central Indiana, including the massive mixed-use Anson development in Boone County near Whitestown.
Founded in 1977, the company 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.