Developer's Fall Leaves Firms In Lurch

Bereft Contractors Sue Bankrupt Bel Air Builder

August 18, 1991|By Alan J. Craver | Alan J. Craver,Staff writer

Philip S. Bathon Jr. thought his contracting company was shifting into high gear when he signed on with Bel Air-based developer Steven R.Hankins.

He was to install the electrical system at a hotel Hankins was building in Ocean City three years ago.

But the 31-year-old contractor has hit rock bottom. He said he expects his 9-year-old company, Systems Electric Enterprises Inc., to file for Chapter 7 bankruptcy within the next few weeks, meaning he'llhave to sell all his holdings.

Bathon contends one man is responsible for his financial problems: Hankins.

"I tried to pull myself out," said Bathon of Ocean City. "I couldn't do it. He put me under."

The Eastern Shore resident is one of 118 creditors Hankins says he owes money to in a Chapter 11 bankruptcy petition filed by the 38-year-old developer and his wife, Susan, in U.S. Bankruptcy Court in Baltimore last month.

Hankins could not be reached for comment for this story. His home telephone number is unpublished, and his businessnumber has been disconnected. His attorney, Marc Kivitz of Baltimore, did not return six calls to his office.

In the petition for protection from their creditors, the Hankins couple say they owed $29 million.

Hankins owes Bathon $164,800, bankruptcy documents show. AndBathon is not the only small-business man hard hit by Hankins -- whocreditors say talked smooth, convincing them he would clear his financial problems and promising more work would come their way if they stuck with him.

H. Carl Stephen, who has built houses in the countyfor nearly 30 years and knows almost all the local builders, said hethinks Hankins tried to do too much too quickly. Instead of taking his projects one step at a time, Hankins took two steps at a time, Stephen said.

"When everything went by his plans, he was a winner," he said. "When they didn't, he was left holding more than he could handle."

Banks, meanwhile, continued to loan Hankins money for his projects without checking on his business practices, Stephen said. "(Hankins) sold himself to the banking industry," he added.

"It's goodif the economy stays. You can become a millionaire pretty quick. Butyou can become a dog pretty quick too."

Verlon C. Wright, who runs a Havre de Grace plastering company that sued Hankins three years ago to get paid for an Abingdon motel project, agreed with Stephen. "(Hankins) was like a kid at a carnival," he said. "He got on the ridesfor free."

Signet Bank of Baltimore, owed $8.8 million, is listedas the biggest creditor in the Hankins bankruptcy petition. A Signetexecutive and a spokesman declined to comment on the bank's dealingswith Hankins.

In addition to Signet, other financial institutionslisted as creditors in Hankins' bankruptcy petition include Bank of Maryland, Household Bank, Key Federal Savings Bank and Old Court Savings and Loan.

Banks continued to issue loans to Hankins, despite ahistory of financial problems that date back to the mid-1980s, when subcontractors began suing the developer to seek payment for their work.

That history was easily accessible to anyone who would have taken the time to research county court records.

Hankins has been sued at least 45 times in Harford Circuit Court since 1984, according to court records. He also faces criminal charges of theft and forging and cashing a counterfeit document.

The $29 million bankruptcy filed by Hankins last week isn't the first he's been involved with. The Hankins partnership that developed the Days Inn in Ocean City filed for bankruptcy in February 1989, listing $9 million in debts. Another partnership controlled by Hankins filed for bankruptcy in July, with $10.6 million in debts for an Aberdeen shopping center.

"(Hankins)said he had everything under control," said Michael A. Donaldson, anOcean City general contractor who claims Hankins owes him more than $200,000 for work on the Days Inn. "He said he would pull it out. He made a lot of false promises.

"I think Mr. Hankins is a scammer," Donaldson said.

The contractor has filed suit in Harford Circuit Court to get some of the money he says Hankins owes him.

In addition to the banks and small subcontractors, Hankins' creditors includes such major developers as Bruce and Nathan Scherr, who are owed $8 million.

Bruce Scherr is president of Scherr Development Corp. of Reisterstown. Nathan Scherr is a former owner of the Baltimore Blast soccer team.

But the small contractors like Bathon and Donaldson are having the hardest time riding the shock waves caused by the collapseof Hankins' development empire.

"I'm a small contractor," the 40-year-old Donaldson said. "I can't absorb $200,000. . . . I have a rough time paying my bills. But I'm surviving."

Donaldson, who operates a one-man Ocean City contracting firm, Alanco Contractors Inc., said he realized that Hankins was having financial problems when he went to work on the Days Inn project.

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