04 Sep American Shingle Files Chapter 7 Bankruptcy
American Shingle filed for Chapter 7 bankruptcy in Georgia owing millions of dollars to creditors. Among the creditors are hundreds of homeowners who paid the company to roof their home but did not receive services promised. For homeowners who are owed money, there are a few things to understand about how bankruptcy works and what will happen in the case.
A recent hailstorm in Charlotte NC brought in several out of town roofing companies who went door to door soliciting business to repair damaged roofs. Many homeowners received insurance checks to cover the cost to repair their roof. Some hired American Shingle and now they may be stuck with a damaged roof and may be out of luck getting back the deposits and insurance money they paid American Shingle.
In a story in the Charlotte Observer, it is reported that there are over 600 victims who stand to lose their deposits including 136 residents of the Carolinas.
“Actually, that’s the worst news they could possibly hear at this point,” said Tom Bartholomy, president of the BBB of Southern Piedmont. “Based on the amount of debts and assets … it doesn’t look like there would be anything left for unsecured creditors.”
American Shingle and its attorney could not be reached for comment Friday. Company chief executive Carlton Dunko told an Atlanta radio station recently that the company sold 3,500 roofing contracts that had not been completed.
Though the petition filed indicates that there are not enough funds to pay unsecured creditors any of their debts, a Trustee will investigate the company and it’s financials and will determine if there are any assets to use to pay to the creditors. If there are any funds to distribute in this case, deposit customers may have up to $2,600.00 of their deposits paid at a higher priority before other unsecured creditors. However the consumer deposit creditors are seventh in line in priority behind administrative, taxes, secured creditors and a few others and so they still may not receive anything at all.
If instructed to file a claim, they should do within the deadline set by the Court because that is the only way to get funds if there is a distribution. The Proof of Claim is normally mailed from the Court, or you can find one here: Official Bankruptcy Proof of Claim form Be sure to check the box on the right hand side if you are entitled to the deposit claim under the Bankruptcy Code Section 507(a)(7).
Chapter 5. Creditors, the Debtor and the Estate
Subchapter I. Creditors and Claims
(7) Seventh, allowed unsecured claims of individuals, to the extent of $1,800 [$2,425 effective 4-1-07. Adjusted every 3 years by section 104.] for each such individual, arising from the deposit, before the commencement of the case, of money in connection with the purchase, lease, or rental of property, or the purchase of services, for the personal, family, or household use of such individuals, that were not delivered or provided.
Customers of the company will likely be notified of the filing by the Bankruptcy Court very soon. A Notice of Filing and Section 341 Creditors’ Meeting will be mailed to creditors, which will give the date of the creditors’ meeting, and directions on whether or not a Proof of Claim should be filed.
Creditors who receive the notice do not have to go to the hearing unless they want to go, and it is not usually something that a small creditor can get much satisfaction from. Creditors often don’t show up at the creditors’ meeting. Some questions may be answered at the meeting, but the most important one, “Will I get the money owed to me?”, is often not known at that time. No judge is present at the creditors’ meeting so customers should not expect to have their day in court at that time.
The Trustee appointed in the case controls the meeting and decides who gets to talk, what questions are allowed, and how long the meeting goes. Depending on how many creditors attend, what has to be covered and what the Trustee plans to ask, the creditors’ meeting may not take very long since it is really just a starting point for the Trustee to begin his/her investigation. Any important issues have to be dealt with in court, before the Judge.
FOR MORE, PLEASE SEE MY ARTICLE: American Shingle Bankruptcy Part Two
Read more: http://www.charlotteobserver.com/2010/09/04/1666492/american-shingle-files-for-bankruptcy.html#ixzz0yby7T8PY
Fox News has also reported on this story:
BBB: American Shingle Bankruptcy Bad News for Customers
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