Battered CCI files bankruptcy papers
The customer impact is minimal.
By James Thorner
Published April 11, 2007
His fleet of pickup trucks repossessed, his debts in the millions, his customers in an uproar, St. Petersburg builder Jesse Battle III has filed for Chapter 11 bankruptcy.
Battle's company, Construction Compliance Inc., sought protection from hundreds of creditors last week in U.S. Bankruptcy Court. CCI listed $10.9-million in debts against $8.9-million in assets.
For hundreds of CCI customers left deeply in debt when Battle stopped building homes last fall, bankruptcy has little impact, said Alan Tannenbaum, a Sarasota attorney who represents about 150 of them.
Tannenbaum has negotiated with Coast Bank, the lender with whom Battle partnered on most of the home deals, to cancel part of his clients' construction loan debts.
"It really doesn't change the dynamic. There wasn't a great expectation on behalf of the customers that CCI would be a source of recovery," Tannenbaum said. "Coast was always the focus."
In fact, in the 209-page bankruptcy filing, Battle lists Coast and its associates as his largest debtor, and claims they owe CCI more than $8-million. After promising up to $110-million in construction loans, Coast cut off CCI last year, helping sink the builder.
Coast denies the claim, although it did fire its executive in charge of the CCI deal, Phil Coon. "We don't owe him $8-million," Coast spokesman Tramm Hudson said Tuesday. "We've referred it over to our attorneys."
Also raising eyebrows, the bankruptcy documents list Florida State Builders as CCI's largest creditor at $1.97-million. Battle's son, Jesse Battle IV, formed Florida State and was an officer with CCI. With CCI's demise, some employees went to work at Florida State, leading critics like Tannenbaum to conclude the companies are about as separate as Siamese twins.
CCI and Coast pitched investors on no-money-down houses in and around Sarasota County's Northport community. CCI promised to build and sell the houses for 10 percent below market value. Buyers, many from out of state, hoped to sell them quickly at a profit.
At the peak of the housing boom in 2005, CCI reported $63.1-million in income. But in recent months, CCI has sold its St. Petersburg headquarters and fired most of its 60 employees. Ford repossessed seven pickup trucks.
"CCI has overwhelming responsibility," Tannenbaum said. "But it has no money."
James Thorner can be reached at 813 226-3313 or firstname.lastname@example.org.
[Last modified April 10, 2007, 23:19:06]
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