Photo of construction workers building on a Florida pier with a bankruptcy document illustration and outline of Florida

Though the construction industry continues to boom for some — as total construction spending reached an all-time high of $1.57 trillion in 2021 — the effects of the pandemic and the tumultuous global supply chain are continuing to make things difficult for contractors.

According to Levelset’s 2022 Construction Cash Flow & Payment Report, payment problems continue to plague contractors, with just 12% of businesses reporting always getting paid on time. This financial uncertainty could be taking some contractors out of business: After 10 Florida construction companies filed for bankruptcy in April 2022, six more followed suit this May.

Two of the businesses filed for Chapter 7 bankruptcy:

Chapter 7 bankruptcy doesn’t involve the filing of a plan of repayment like other chapters of the bankruptcy code. Instead, a debtor’s non-exempt assets have to be sold so that the proceeds can pay the debtor’s creditors; certain property can be held as exempt, but the company’s remaining assets will be liquidated. Chapter 7 filings usually result in loss of assets and property, as well as the closure of the business itself.

The Ocoee-based FL Cable finds itself in a tough spot, with its filing noting a claimed $0 in assets balanced against at least $93,936 in liabilities — with a large majority of that stemming from outstanding legal debts.

Despite the Merritt Island-based Johnny T. Wiedmann Roofing receiving glowing reviews from customers even in the days before its bankruptcy filing, the company listed less than $50,000 in assets and between $100,000 and $500,000 in liabilities on its filing.

Contractors in this article
Johnny T. Wiedmann Roofing Inc.
Johnny T. Wiedmann Roofing Inc.
C
Payment Score
75 / 100

Though the company has received positive appraisals from its customers, that doesn’t tell the complete story. 

Johnny T. Wiedmann Roofing’s Levelset Payment Score is just a 75/100, with 80% of its projects in 2021 dealing with some kind of payment problem, including dealing with at least five mechanics liens filed on projects — showing just how impactful payment issues can be on a company’s ability to keep running.

However, positivity remains for the four companies that filed for Chapter 11 bankruptcy:

  • Poppa Construction, Inc. (May 5)
  • RR Builders 2018 LLC (May 17)
  • Lopsang Construction Service, LLC (May 25)
  • Johnson & Johnson Construction Company Corp. (May 30)

Chapter 11 bankruptcy is frequently called “reorganization” bankruptcy, as it usually allows the debtor to remain in possession of their assets and to continue operating its business. Unlike Chapter 7, the debtor can propose a plan of reorganization in order to pay its debts without losing assets or property.

Reorganization can be a useful tactic for companies regardless of how much their debt is, and this group of filings really emphasizes its power, as the four companies all have significant debts and few assets.

Ft. Myers’ Poppa Construction has between $1 million and $10 million in liabilities according to its filing, a major blow as it also notes that it has less than $500,000 in assets. The two Miami-based companies are in similar positions: Johnson & Johnson Construction Company noted between $1 million and $10 million in liabilities alongside $500,000 to $1 million in assets, while RR Builders 2018 claimed the same range of liabilities against less than $50,000 in assets.

Orlando’s Lopsang Construction Service has a more clear view of its debts, as its filing notes that it has $664,063.39 in liabilities — almost all of which stems from small business loans.