Manor Builders' contractors, suppliers petition, stop sale Foreclosure auction halted

unpaid crews want to finish homes

Real estate

March 25, 1998|By Robert Nusgart | Robert Nusgart,SUN STAFF

A foreclosure auction of the Summerwoods townhouse development in Owings Mills was canceled yesterday after a group of unsecured contractors and suppliers filed two involuntary bankruptcy petitions in federal bankruptcy court against Manor Builders Inc. and Summerwoods One LLC, the owners of the project.

It was a strategic move by 18 contractors and suppliers to stop the auction of the partially completed 64-unit development, according to lead attorney William M. Rudow, who represents Number One Supply Corp. In doing so, Rudow said, the contractors would ask the court -- or the trustee, once named -- to permit them to complete work on eight unfinished homes, thus allowing them to be paid for their work and getting those buyers holding contracts into their homes.

Rudow said the contractors are owed approximately $600,000.

"All that equity, everything that went into building that thing was paid for, was earned, by the subcontractors," Rudow said. "If there would be a foreclosure, all the equity that the subcontractors put into those three buildings would be lost.

"On the flip side, the bank would have gotten the benefit of all of that [equity] without paying anybody. The bank ends up with an improved property, and my guys end up with nothing," Rudow said.

"It is the desire of the subcontractors to see this townhouse project in Owings Mills completed, using the supervision of the federal bankruptcy court, as opposed to being sold at foreclosure."

The foreclosure auction was scheduled by the Chesapeake Bank of Maryland -- the lien holder on the property -- after Palmer Williams and his wife, Carol, the principals of Manor Builders, abruptly ceased operation in February at Summerwoods and the Village of Gracecroft, a 62-unit townhouse community near Havre de Grace. They fled and their whereabouts remain unknown.

Robert Glushakow, attorney for Chesapeake Bank, said the bank is reviewing its options, which include asking the court to lift the stay placed on the development when the involuntary bankruptcy petitions were filed.

"The bank will undertake its efforts to try and get the stay lifted, and we always reserve our options," said Glushakow, who said the contractors' move was not unexpected.

"I hope that the bank will work with us so we can get these good folks into their homes," Rudow said. "The project manager is ready, willing and able to come back and lead the project. So it should be a seamless transition for the buyers out there if we can get the bankruptcy court approval and if we can get the trustee's approval.

"If they [Chesapeake] fight us it will delay everything. If they work with us it will speed everything up."

Pub Date: 3/25/98

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