One month after filing for Chapter 7 bankruptcy, North Texas-based building firm RJ Construction has informed customers that they are not in any position to complete scheduled and unfinished projects.
Lawyers claim that RJ allegedly misled customers about the state of the company following the start of a legal fight over unpaid dues with Arlington Independent School District.
In a hearing held on September 13, over 40 of the 190 total creditors listed on Robert Jordan Construction’s bankruptcy filing listened in on the over-two-hour inquiry into how to proceed following making deposits in the tens of thousands of dollars for work that remains unfinished.
Sole proprietor and namesake of the company, Robert Jordan, reportedly stated on the call that his firm experienced a “cashflow crash,” and lost interest from a potential buyer.
Josh Usry, an Arlington resident who made a $30,000 deposit for a remodeling project with RJ Construction before the August bankruptcy filing, remarked that “any kind of repair from them at this point, I think, is impossible or not probable because they’re not interested.”
RJ Construction attributes financial fallout to a battle with Arlington Independent School District
In June of 2021, Jordan sued the Arlington Independent School District (AISD) over claims that his company was not paid $1.245 million for its work on the Sam-Houston High School following Winter Storm Uri in February of that year.
In an interview with Dallas’ WFAA news, Jordan claimed that he and 37 employees of RJ worked an emergency schedule for 11 days to dry out and dehumidify the entirety of the 450,000-square-foot campus to stop further damage from burst water pipes.
According to a fact sheet published by AISD in February of this year, after being sent an invoice for $1,245,600 on March 5 — however, the school district maintained that only 191,000 square feet of the school were damaged by floodwaters, and thus all that RJ worked on was less than half of the campus.
An insurance adjustor with Engle, Martin, and Associates claimed that the firm had performed just $179,520.54 in work, and sent a check for that amount in October with instructions on providing additional documentation of work in order to be paid more.
To date, RJ Construction has not cashed that check, as well as failed to provide any further documentation regarding work they performed at Sam-Houston, claimed AISD representatives.
Attempts at mediation have been sought but have been unsuccessful according to both sides — with Jordan eventually filing an appeal.
A point of contention in these filings have been the wording from one of AISD’s motions on September 10, 2021, stating that they would only agree to go to mediation once the district has exhausted all appeals possibilities and if Jordan “has not lost everything.”
“To be clear, RJ Construction’s demise was a direct and calculated goal of The Arlington AISD,” Jordan claimed in an August 9 email. Additionally, Michael Hammond, an attorney representing Jordan, “described Jordan’s legal fight with Arlington ISD as the ‘domino’ that pushed the bankruptcy filing,” according to WFAA.
AISD claimed in their fact sheet, that such accusations are baseless.
“Arlington ISD has never had any desire or motivation to bankrupt RJ Construction,” reads the statement.
“[We have] a duty to ensure that taxpayer money is spent only on actually performed and documented services. Language in a brief filed by Arlington ISD’s attorneys referenced RJ Construction (eventually) “losing everything” as it relates to the appeals process and lawsuit.”
Several claim that Jordan allegedly ‘kept taking money’ by misleading customers
In the months following Jordan’s suit against AISD, RJ construction began a campaign with lawn signs demanding that AISD “Pay RJ,” highlighting their purported grifting out of a million-dollar-plus job.
Multiple customers, noting their initial empathy toward a supposed wronged party, recounted hiring RJ Constriction for projects only to see them stall not long after starting.
Arlington’s Christina Ridings said she and her husband paid RJ Construction $38,000 during the summer to remodel her home’s lower deck and balcony. After seeking an additional $10,000 to start roofing in early August, RJ Construction shuttered its Texas office by the end of the week.
“When he cried out to the community, the community responded to him in-kind,” Ridings said. “They said, ‘Oh, here’s a guy who’s suffering — appeared to be suffering — and they got behind him. People hired him left and right to support the local guy.”
As a friend of Jordan’s for over 30 years, Travis Hyden claimed that everything seemed fine in the days leading up to hiring RJ for work on his mother’s home, which had been damaged in an electrical fire.
After he and his mother paid RJ $115,000 for repairs, Hyden claims that contractors removed rubble before ceasing further construction completely.
In a motion submitted on September 2, attorney Dennis Eichelbaum, whose firm Eichelbaum Wardell Hansen Powell & Muoz represents AISD, claims that Jordan and his counsel were considering declaring Chapter 11 bankruptcy around the time the Hydens approached RJ Construction.
“The bankruptcy did not begin until August of 2022, and for six months Robert Jordan Construction kept taking customer’s money,” the filing reads, pointing to Hyden’s February $115,000 deposit.
Customers recouping their money is doubtful
For the dozens of customers who have made payments to RJ Construction, recovering any form of repayment from RJ Construction is improbable due to the nature of the bankruptcy.
“Unlike Chapter 11 reorganization, Chapter 7 is the complete liquidation of the company’s non-exempt assets,” says construction attorney Alex Benarroche.
“The bankruptcy trustee will then distribute the funds in order of hierarchy, with unsecured creditors at the bottom of the totem pole. Given the number of creditors listed in RJ’s bankruptcy filing , it is highly unlikely that there will be much of any remaining funds to pay out the homeowner claims.”
A court-appointed trustee will seek to take hold of the filing party’s nonexempt assets, such as personal property, and use the subsequent proceeds to pay creditors.
In cases involving construction businesses such as this, those with liens against assets are primarily privy to secure repayments.
Arlington police have gone on record to state that several area customers have reported unfinished work from RJ construction, and while spokespeople with the Tarrant County DA office cannot comment further on the status of those reports, several scorned customers believe the notoriety of the case will prompt for better preventative measures in the future.
“Regardless of any criminal restitution or any civil pending cases, we probably won’t get anything out of it,” Travis Hyden said to KERA News. “Hopefully we can get some justice on the criminal side of things, at least maybe have the state of Texas pay attention here and maybe start looking at reform for contractors to try and protect some consumers.”