Despite the major housing construction boom experienced by so many across the United States during 2021, not every company is benefiting — a situation that became particularly important for Georgia-based roofing provider Planet Roofing and Services LLC, which filed for Chapter 7 bankruptcy on September 8, 2021.
Despite a small number of creditors — only three listed in the filing — the Norcross company’s debts and legal situation appear to be especially difficult for the company. Planet Roofing lists only $18,361 total in debt — but also notes that it currently holds $0 in monetary assets and has no property to declare.
Even with a relatively low amount of debt, the information behind the debt itself underscores the weight of the situation for the company, as the filing lists a $1,269.80 claim from Synovis Bank stemming from a checking account overdraft in June 2021.
The company markets itself as being especially in tune with the technology-driven advances seen in the construction industry in recent years, claiming that it “specializes in roofing with the highest quality technology and construction equipment.”
According to the company’s website, their business model has been focused on the needs of consumers during the COVID-19 pandemic, while also trying to appeal to those who may be considering roof work and are considering consultation during the current housing construction boom.
“During this pressing time of distancing we are providing FREE consultations with high powered drones to consultant [sic] your roof and you can follow along with a tablet we provide from the comfort of inside your home,” the company offered. “We will use 4K high resolution drones to fly over and video tape your roof to inspect to see if you have any substantial hail or wind damage that might cause leaks or even cave ins.”
The company notes that it has completed 316 projects in 11 years of operation, and claimed an edge over any competition — boasting an “A+” rating from the Better Business Bureau on its website:
“Some examples of how we differ from other Roofing companies is we only use top grade Architectural Shingles that are warrantied for up to 25-50 years, we remove all old flashing and replace it with new flashing that includes all step/counter/ flashing along rake walls, we check for any rotted decking, and we use screws to install your new pipe boots not nails that can raise over time. After we install the new roof we also go back behind our insured and bonded crews to make sure all debris is picked up and you are satisfied.”
Despite successful background and adaptive business model, the company’s legal issues were enough to push it into bankruptcy
Regardless of the changing way that the company has tried to appeal to the market, these claims of high-level and high-tech workmanship have not made things easy for Planet Roofing. Outside of the overdrafted checking account, only two claims were needed to push the company’s finances to the breaking point: A February 2021 claim by ABC Supply Co., Inc. stemming from materials and supplies debts, and an August 2020 claim by homeowner Betty Rice.
Rice’s claim currently remains pending in Gwinnett County Magistrate Court, where court records indicate that a September 9, 2021, default calendar was set — meaning that Planet Roofing likely failed to respond to Rice’s claim in time, and that a default judgment against the company is likely to follow.
The two claims come only to $9,356.29 and $7,735.54, respectively. While these amounts seem small, they could represent a large part of the company’s finances. For the period from January 1, 2020, to December 31, 2020, the company listed gross revenue of only $70,000 — a number that doesn’t take into account any operating costs such as costs for supplies or payments to employees.
Overall, the filing represents a particularly tough situation for Planet Roofing: Chapter 7 bankruptcy is often known as liquidation bankruptcy, as it doesn’t allow for the filing company to develop a plan of repayment and restructuring as in Chapter 11 bankruptcy cases.
Chapter 7 instead requires the filing company to liquidate its non-exempt assets in order to pay back its creditors, which makes it unlikely that companies who file for Chapter 7 bankruptcy can easily recover.
Learn more about the three main types of bankruptcies in the construction industry.