The owners of a company that builds custom homes have filed for bankruptcy following an extended period of debt defaulting, according to local business news. Michigan residents may be familiar with home building giant BiltRite Homes LLC, formed in 2009. The company's owners have filed for Chapter 7 bankruptcy in the face of overwhelming debt, which may help to forgive and otherwise satisfy those debts, allowing both owners to move toward a brighter business future.
The company is owned by Robert Fersch and Gary Ogle, himself a notable business owner of many years. The company estimates its current debts at between $1 million and $10 million spread across several dozen creditors, compared to a net worth of just $50,000. Unfortunately, the problems for BiltRite do not end there.
According to their representation, the company failed to pay out certain subcontractors helping to develop the custom homes BiltRite offers. Those contractors have now filed liens against some homeowners, many of whom have already moved into their custom homes. It is hoped with the bankruptcy filing, BiltRite will be able to satisfy those contractors and remove the onus of responsibility from the homeowners in question.
It is important for a business to live up to its obligations to its customers, even if that means taking a financial step that many Michigan business owners agree can be scary. In the case of BiltRite, a Chapter 7 bankruptcy filing is a good move fiscally because it may help the company take care of its outstanding debts to subcontractors, who may then have no reason to ask homeowners to shore up the difference. This, in turn, may validate BiltRite's name even as the company closes its doors.
Source: indystar.com, Carmel home builder BiltRite seeks bankruptcy, Jeff Swiatek, Nov. 27, 2013