With their gross revenue decreasing by 77.6% between 2018 and the date of the filing, California general contractor Legacy Construction and Development declared Chapter 7 bankruptcy on December 1, 2020, according to official bankruptcy documents from the US Bankruptcy Court for the Central District of California.
Legacy Construction and Development, which is headquartered in Westlake Village, California, claims in the bankruptcy filing that they owe $2,315,340.22 in unsecured claims to 118 creditors — 56 of which are contractors and material suppliers.
At the time of their bankruptcy filing in December of 2020, Legacy Construction and Development reported having:
- $2,315,340.22 in total liabilities
- $662,757.52 in total assets
- $2,637.46 in total checking
- $654,620.06 in accounts receivable
From January 1, 2020 until the December 1 bankruptcy filing date, Legacy Construction and Development reported $1,830,428.32 in gross revenue, according to the bankruptcy filing.
In 2019, the general contractor reported earning $6,280,574 in gross revenue — signalling nearly a 71% decrease in revenue from 2019 to the general contractor’s current revenue total in 2020.
Legacy Construction and Development claimed they earned $8,162,841 in gross revenue in 2018 — which is a 23% decrease in revenue from 2018 to 2019.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy provides for “liquidation,” which USCourts.gov describes as “the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.”
To avoid liquidation, USCourts.gov advises that debtors can instead file for Chapter 11 bankruptcy: “Debtors who are engaged in business, including corporations, partnerships, and sole proprietorships may prefer to remain in business and avoid liquidation.”
Compared to a Chapter 7 filing, Chapter 11 bankruptcy allows the debtor to seek an adjustment of debts, which is considered “reorganization bankruptcy.” Chapter 7 bankruptcy also means that the debtor’s property is still subject to liens and mortgages that pledges the property to additional creditors. Meanwhile, the debtor may be able to keep their additional “exempt” properties.
USCourts.gov also states that creditors still liquidate a debtor’s remaining assets upon filing for Chapter 7 bankruptcy. This could potentially lead to property losses for the debtor.
Legacy Construction and Development has 118 unsecured claims
Unsecured
At the time of their bankruptcy filing, Legacy Construction and Development reported having 118 unsecured claims worth a combined $2,315,340.22.
Of the 118 creditors, 56 are contractors or material suppliers:
- Above & Beyone Tree Service Inc. (No amount of claim is listed in the bankruptcy filing)
- Agoura Sash & Door – $12,791.92
- All American Roofing, Inc. – $5,000
- All-Powerful Plumbing, Inc. – $27,212.47
- Ambrose Electric Inc. – $3,116
- Anawalt Lumber Co. – $46.98
- August Roofing Inc. – $11,390.40
- Bancroft Construction, Inc. – $4,980
- Barrett’s Crenshaw Carpet Center – $12,202
- Barr Commercial Door Repair – $6,622.64
- Beyond Decks, Inc. (No amount of claim is listed in the bankruptcy filing)
- BGM Installation, Inc. – $209,450.39
- BMC West, LLC – $3,218.17
- Bradco Kitchen Inc. – $14,514.54
- Cal-State Site Services – $1,115.73
- California Deck Builders, Inc. – $5,112
- California Door & Hardware – $6,757.27
- Calypso Heating & Air Conditioning – $5,780.84
- Casa Del Sol Architectural Ironwork – $16,170
- Cisco Drywall – $15,820
- De La Torre Pastering – $1,656
- Discovery Ridge Builders, Inc. – $4,056
- DIY Home Center – $248.84
- Dunn-Edwards Corporation – $69.64
- Floor and Decor – $10,022.25
- Home Depot – $1,134.29
- Installation Made Easy – $11,598
- JC Plumbing N Things – $4,208.84
- Jerry’s Tree Service – $1,370
- Jim’s Heating and Air Conditioning – $603
- JM Plumbing Inc. – $9,445.00
- JMJ Lath and Plaster, LLC – $7,370.00
- Kitchen Places – $2,142.00
- L.A. Construction Company Inc. – $56,536.53
- Malibu Canyon Landscape & Maintenance – $3,879
- National Construction Rentals – $384.36
- New Life Construction – $1,828.55
- Pacific Commercial Company – $3,692
- Pacific Kitchen & Bath – $800
- PAH Mechanical Services – $5,419.50
- Pine Tree Painting Co. – $4,950
- Powerful Systems Inc. – $5,000
- R J Sullivan Construction, Inc. – $3,250
- Resonne Building & Design – $20,228.04
- Roadside Lumber & Hardware (No amount of claim is listed in the bankruptcy filing)
- Rock N’Roll-Off by Recyc – $2,720.80
- Smith Brothers, Inc. – $71,020.60
- Superior Stucco & Plastering – $11,420
- T & U Roofing – $4,315
- The Sewer Spy – Spy Rooter Inc. – $2,450
- Thomas Construction – $4,390.20
- Thomas Construction Group Inc. – $7,609.20
- Thome Waterproofing Company – $11,318.34
- Varo Sheet Metal – $8,869
- Wallace & Wyble Landscape, Inc. – $2,500
- Waste Management – $632.30
Secured
According to Legacy Construction and Development’s official bankruptcy filing, the general contractor has no secured claims.
Amid bankruptcy, Legacy faces at least 3 mechanics liens
At least three active mechanics lien claims have been filed against Legacy Construction and Development since August of 2019 worth a combined $683,508.89 in unpaid construction work.
On August 8, 2019, subcontractor Nibbelink Masonry Construction Corporation filed the largest of the three liens worth $559,559 at an apartment complex project in North Hills, California.
The second-largest lien against the GC was filed on May 15, 2020, worth $113,190.89 for construction at a housing development in Pacific Palisades, California.
Material supplier LT Generators filed the third-largest lien on April 24, 2020, in the amount of $10,759 at another housing development project in Malibu, California.
As of December 4, 2020, all lien claims are still active.