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Homebuilder Estridge files for bankruptcy

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Local homebuilder Paul Estridge Jr. on Thursday filed Chapter 7 personal bankruptcy, agreeing to surrender his two homes—one in Westfield and one in Florida—and other possessions to satisfy a mountain of debt he accrued from his former business.

Estridge owes a list of creditors including banks, suppliers and vendors more than $50 million, he said. In a bankruptcy filing with the U.S. Bankruptcy Court Southern District of Indiana, Estridge listed assets worth between $1 million and $10 million. Estridge told IBJ on Thursday that he thought his assets had a value of $5 million or less.

The Estridge Group, a fixture in the Indianapolis-area’s homebuilding industry for more than 40 years, became part of a Houston-based company earlier this year when the company could no longer keep up with a mounting pile of debt. Estridge took over the business from his father, Paul Sr., in 1992.

Estridge said it is common practice for home builders and developers to make guarantees against loans using personal property and cash. The bankruptcy filing only allows Estridge to keep $9,000 of his assets and $350 in cash. Estridge said he will be able to keep two of his automobiles because he owes more on them than they are worth.

Estridge, now Indiana Division president for Houston-based David Weekley Homes, said he filed bankruptcy because the obligations to banks and other creditors are coming due and he has no way to pay them.

Despite the fact that many of the companies he owes will never get all of their money back, Estridge said most on the list have been very supportive.

“The support I’ve received has been overwhelming,” Estridge said. “My suppliers and vendors have been especially supportive. They saw I mortgaged my house and put every penny into this.”

A handful of companies have filed lawsuits against Estridge and his company, with five cases still pending in Hamilton County courts.

Through his association with Weekley, Estridge said he has been able to finish all the homes he started and honored all his home warranties.

“From a reputation standpoint, we’ve done well,” Estridge said.

Estridge Group had as many as 150 fulltime employees in 2004 when it was building more than 300 homes a year as one of the area's largest builders.

Founded in 1976, David Weekley Homes operates in 14 cities across the country and is the latest outside home builder to enter the Indianapolis market.

Estridge, which traces its roots to 1967, this year became the latest in a string of local homebuilders to succumb to one of the worst housing markets in decades. C.P. Morgan Communities LP and Davis Homes folded in 2009, and Hansen & Horn Group Inc. followed suit in 2010.

Nationally, new-home sales declined from 1.2 million in pre-recession 2005 to 321,000 in 2010. According to the Builders Association of Greater Indianapolis, home building permits during the same five-year period in central Indiana dropped from 13,202 to 3,720.

New-home construction could fall even more this year.

While the personal bankruptcy will be on Estridge’s personal credit report for 10 years, Estridge said it will have little impact on his homebuilding career.




 

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  • http://www.joshwillishomes.com/
    Renovations really do add value to the house. This may not seem sensible at first, a bit of money to make a house look good that you are about to shift out of.
  • Karma
    This is what happens when you take money from your loyal employees and get caught. My Uncle paid the ultimate price for more of Paul, Jr's heinous crimes to come to light. What a truly disgusting individual.
  • Another owner
    He will soon be facing his day in court for the items not completed on my house. He hasn't folded his company officially, and I never signed the new warranty plan. So yes, his company is on the hook for everything. I have it on very good authority that the work that was completed on a few houses in my neighborhood after he walked away was done by a bankruptcy company trying to tie up loose strings dor him. Additionally I have talked to several vendors and the man is dilusional to think they support him. Hey Paul, you can sell some of those assets and right me a check! Christian morals my butt!
  • Wondering
    Amazing, the debt/asset ratio for this bankruptcy filing. Just last fall, Estridge was pleading his case to city of Westfield, to fund a new project, to the tune of a 66 million dollar loan. Glad the city declined that one.
  • Daddy's business
    From Estridge, to Marsh, to Hoffmeister, to Irsay. It's tough to run daddy's business.
  • Christian?or conman
    Yep, led all of us (suppliers and vendors) along forever. When I pulled the plug he offered to pay us cash from his personal accounts. Huh go figure, I still refused!
  • Disgruntled homeowner
    He did NOT honor his homeowner warranties. He walked away after "closing his company". Shutting down does not relieve you of your legal obligations unless you file a corporate bankruptcy. I feel sorry for the new homeowners in our subdivision that were supposed to have a three-year warranty -- the benefit of the bargain they paid for -- and are left without recourse. He circulated some letter about transferring the warranty, but that guy -- a former Estridge employee -- never returned fellow homeowner calls! We recently had to have $600 of roof work done and we are still under warranty -- does that sound like he is honoring them?! He left homeowners in a lurch and still comes across in the media as a remorseful, 'Christian" man. He also talks about buying back one of his homes from the trustee; with no funds, how do you do that?! Perhaps his vendors and contractors should consider an involuntary bankruptcy of the corporate Estridge and learn where all the inventory homes and equipment were transferred??!!
  • Honored Warranties???
    He says he has honored homeowners warranties? That comes as news to those of us who he sent letters to saying he was no longer able to do so earlier this year.

    Does the IBJ just print press releases provided to them by businesses or does it research them to ensure that they are truthful?

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