Builder looking to court for relief
Posted on Thursday, December 20, 2007
Springdale-based custom home builder Tim McMahon filed for Chapter 7 bankruptcy protection Friday, citing between $ 1 million and $ 10 million owed to 279 creditors.
Fayetteville attorney Jill Jacoway filed the petition on behalf of McMahon and his wife, Jennifer Brandon McMahon, in U. S. Bankruptcy Court for the Western District of Arkansas. They requested an extension until Dec. 31 to complete a listing of the exact amount owed to each creditor.
Chapter 7 of the U. S. Bankruptcy Code provides for selling the debtor’s assets and distributing the proceeds to creditors.
A telephone call to McMahon Brothers Construction was not answered Wednesday. An entry listed under Jennifer McMahon in Fayetteville is no longer a working telephone number.
A message left at Jacoway’s office Wednesday was not immediately returned.
“More [builder bankruptcies ] are expected. More will come down the path,” said Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business. “The longer the market goes sideways... it remains difficult for some people to remain solvent.”
The college is part of the University of Arkansas at Fayetteville.
Deck described a “sideways market” as one in which housing prices remain stagnant, building permits remain low and credit markets are at a standstill both nationally and locally. “So it is not moving up, not moving down. We’ve reached a new equilibrium,” she said. “We’re in a great period of uncertainty and working our way through the excesses of the past.”
McMahon’s petition listed between $ 100, 001 and $ 500, 000 in estimated assets.
McMahon Brothers Custom Homes Inc. began in Edmond, Okla., in 1977 and in Northwest Arkansas in 1994. The company specializes in single-family homes and offers custom building services with design, interior design service and drafting, the company’s Web site states.
The company builds mainly in Fayetteville, Springdale, Rogers and the surrounding area. The cost of homes by McMahon Brothers Custom Homes is between $ 250, 000 and $ 1 million, the Web site said.
Nearly 70 construction or related businesses in Northwest Arkansas filed for bankruptcy protection during the year, according to U. S. Bankruptcy Court filings. Lowell builder Aaron Nickell filed for Chapter 7 bankruptcy Nov. 9, listing between $ 1 million and $ 100 million owed to 277 creditors. Nickell missed an extended deadline to file the amount owed to each creditor on Dec. 10.
To contact this reporter: sroberts@arkansasonline. com
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