INQUIRER REAL ESTATE WRITER
T.H. Properties L.P. sought U.S. Bankruptcy Court permission today to close on one of its completed houses in Hatfield Township, the first since the Harleysville home builder filed for Chapter 11 protection April 30.
The request is likely to win Judge Stephen Raslavich's assent tomorrow, bringing some relief to Continental Bank, which lent brothers Todd and Tim Hendricks more than $5 million to build some of the houses in their Westport Farm development and other projects, and perhaps kick-starting THP's recovery.
Raslavich might have approved the motion by T.H. Properties' attorney, Natalie D. Ramsey, during today's 90-minute session at Bankruptcy Court in Philadelphia, but mechanics' liens - claims from contractors - and buyers looking for refunds on their deposits got in the way.
ProBuild, which is owed about $9,000 for materials used in the construction of three of the Westport Farm houses and other developments, contended that the sale of the house would create equity on which it could draw for payment.
ProBuild's attorney, Stephen Adams of Reading, Pa., said his client should be able to collect what it was owed from the proceeds of the sale. Raslavich said ProBuild's request did not seem out of line as it was a small amount.
Ramsey, the company attorney, was concerned about similar claims, noting that "mechanics' liens are trickling in every day." She said the developers believed there were 50 on the list.
The judge suggested that Ramsey change her motion to allow mechanics' liens to be paid if sale proceeds were sufficient to cover them.
Attorney David Marshall also went to court today to find out what happened to the $22,000 deposit of his clients, Michael and Evelyn Fosey. The money was supposed to have been returned when THP's lending arm, Hendricks Mortgage, declined them a loan in December because of a late payment on another mortgage.
Ramsey said THP did not have the $22,000.
"Where is it?" Raslavich asked.
"It was deposited in operating funds," Ramsey replied.
"Isn't there an escrow provision in Pennsylvania law?" Raslavich asked, referring to Article 5408 of the state's Uniform Planned Community Act of 1997, which requires it.
Ramsey replied that the law was unknown to home builders.
"If it is the practice of home builders to disregard the law, this is going to be a very dispirited day," the judge said.
Marshall and Ramsey will try to reach some agreement. The house, which was priced at $427,490 in December, has been sold to another buyer for $398,187.