A custom homebuilder with roots in prefabricated housing for World War II veterans has filed for bankruptcy-law protection, citing sluggish sales during the housing slowdown of the past few years.
Pridemark Enterprises Inc. of Millersville, one of Maryland's zTC oldest custom builders, sought Chapter 11 protection from creditors Wednesday in U.S. Bankruptcy Court in Baltimore, listing assets of less than $50,000 and debts of more than $1.14 million.
But the company, which builds custom, single-family houses in the Baltimore region priced from $120,000 to $500,000, still intends to complete unfinished homes with no delays, plus start a new modular home business, said Roger Blitz, president, and the third generation of his family to head Pridemark.
"We're continuing to operate under the court's protection, and that's it," Mr. Blitz said yesterday. "It will be business as usual. We will continue to build [homes] and complete them and do the very best job humanly possible with them."
Mr. Blitz declined to say how many homes remain unfinished or how many were built last year. He said he hopes to work out a reorganization plan acceptable to the court, then continue building, even expanding by affiliating with a company that custom-builds housing modules in a factory. Without being hampered by debt, he can avoid some of the building delays he faced in the past, he said.
Some of Pridemark's customers said yesterday that they were satisfied with the quality of the work but that delays had caused them to lose faith in the builder.
One customer, Carol Bond, said Pridemark never finished some minor repairs or paid the subcontractors who installed the appliances, carpeting, heating and duct work, insulation, siding and roofing in her split-level, three-bedroom Pasadena home.
"The biggest problem for us is no one will adhere to the services or warranties," said Ms. Bond, an office manager, who said she was unaware of the company's problems until shortly before her house was completed in May. "Pridemark had a 50-year history and a good reputation and the references they gave us were good. If I had the opportunity to [have a home built] again, I'd do it again but would be much more involved. I'd be my own general contractor."
Ms. Bond said that several of the subcontractors had placed liens against her house.
MA April Ladd and her husband canceled their contract with Pride
mark two months ago, when their four-bedroom Colonial in Churchton, in southern Anne Arundel County, was just half-finished after nearly a year.
"They were projecting it would be finished in six months, and it kept dragging out," said Ms. Ladd, who said she and her husband have since taken on the role of general contractor and expect the home to be finished in another month. "They just kept promising it would speed up and it never did."
Court records list some of Pridemark's largest creditors as American Lumber Corp., owed $79,982; J. Jos. Gartland Plumbing, owed $71,631; the law firm of Adelberg, Rudow, Dorf, owed $58,790; Ridge Lumber Co., owed $45,715; and Central Building Supply, owed $35,745.
On Thursday, Arundel Federal Savings Bank, which holds three secured mortgages on properties in Millersville, Lutherville and Finksburg totaling $786,750, asked the court to appoint a trustee, stating in its motion that "the debtor [Pridemark] has demonstrated a gross inability to . . . pay its creditors and/or carry on its business -- to the continued and chronic detriment of its creditors and customers alike."
Mr. Blitz blamed his troubles on the slowdown in sales of both new and existing homes. Though many of his customers buy their own lots, his company has bought lots in high-growth areas to offer customers. When the lots turned over more slowly than anticipated, interest payments began draining the company, he
said. During the past year, he said he has been forced to lay off more than half of his employees.
"Some tough times have hurt us bad," Mr. Blitz said. "The recession didn't help. Overall, the market has been very, very slow for all builders. The lots you don't turn over have an appetite, and you have to make that payment. It got to be too much."
Though not all custom home sales are recorded in area multiple listing systems, making such sales difficult to measure, that end of the market has remained relatively flat since 1990, said Dwight Griffith, president of the Home Builders Association of Maryland. As job losses and increases in interest rates have hurt the housing market, many custom builders have been forced to close, he said.
"Everyone is shopping a lot harder now," Mr. Griffith said. "It's very, very competitive out there."
Mr. Blitz's grandfather, Eugene Blitz, founded the building company in 1946 and built prefabricated, single-family homes.