Bankruptcy

The Chapter 7 Bankruptcy Filing Of American Shingle & SIding, Inc.

By Scott Riddle

The local and national news has picked up on the Chapter 7 Bankruptcy filing of American Shingle & Siding, Inc.  The case was filed on September 2, 2010, as Chapter 7 Case No. 10-85541-MGD (click here for the petition).  The schedules were not filed with the petition, but the petition indicates that the company had assets between $1-10 million, and claims of $10-50 million. The Chapter 7 filing reflects that American Shingle has ceased business, and the Chapter 7 Trustee is now administering the estate and assets.

It is certainly no surprise that another company in the construction business has gone under.  What does this mean for customers who have paid for work that has not been completed or for warranty claims?  The news is not good, as in the overwhelming majority of Chapter 7 cases, there is no distribution for pre-petition unsecured creditors.  As of now, it is not clear whether the company placed deposits in a separate account, but that would be unusual for such companies.  In most cases, the finds go into the general operating account and/or are used to fund labor and materials for other projects. What is a certainty is that American Shingle will not be doing any more work.

American Shingle is a little different than other companies because of the press it has received in the last few months. The company has recently been the subject of an investigation by the U.S. Secret Service.  An article in the Charlotte Observer reveals that the company has several unhappy customers in that state. WXIA Channel 11 news in Atlanta did a recent story on the closing.  One couple is allegedly out $7,000. 

If you are owed money by American Shingle, there are a couple of important things you need to consider.  First, even if you have contact information for the owners, managers or employees, federal law prohibits you from contacting them to collect a debt. Further, while you no doubt want information about the money they owe you, calls to their lawyer or the trustee will not likely lead to satisfaction as it normally takes several months for these cases to shake out. 

There is one very important consideration for customers of American Shingle.  The names and addresses for creditors has been filed with the petition, and more detail will be available when the full schedules are filed (I removed 18 pages of names and addresses from the link provided above).  This is public information readily available to anyone.  Other companies, legitimate and otherwise, will view this information as very high quality leads for people who obviously have a need for roofing services. In other cases, unscrupulous vendors have gone after these potential customers with various sales pitches, and many will falsely state that they are somehow related to the bankruptcy company or that they have have some kind of authority to take over the work of American Siding.  Do not do fall for these scams. Reputable contracts may contact you from the creditor list, but they will understand that you likely have lost your money with American Shingle, and will not falsely state that they have authority to complete American Shingle jobs.  As with everything else, fully investigate companies with online reviews and the Better Business Bureau.

Scott Riddle's practice focuses on bankruptcy and litigation. Scott has represented Chapter 7 and 11 debtors, creditors, trustees and other interested parties in bankruptcy cases and bankruptcy litigation.  For more information, click here.

Full post as published by Georgia Bankruptcy Blog on September 05, 2010 (boomark / email).