Custom Home Builder in Sunshine State Files for Chapter 7 Bankruptcy
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Custom Home Builder in Sunshine State Files for Chapter 7 Bankruptcy

November 23, 2012

By: John Clark

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Paradise Homes, a custom home builder in Tampa Bay, Florida, has joined the parade of similar companies into Chapter 7 bankruptcy, according to a recent report from the Sarasota Herald-Tribune.

Sources say that Jim Butler, the president of Paradise Homes, filed a bankruptcy petition in federal court for two of his home construction companies. The decision to file for Chapter 7 means that Butler will likely liquidate some of his assets in order to raise money to pay his creditors.

In addition to the bankruptcy filing of Paradise Homes, which is listed in corporate documents as Extreme Remodelers of Sarasota LLC, Butler also sent Paradise Lifestyle Center LLC into bankruptcy court.

Sources say this second company operates a store in Tampa Bay that offers cooking demonstrations and sells home appliances. Neither Butler nor his Chapter 7 bankruptcy lawyer responded to calls from reporters, but the company's financial struggles are not particularly surprising, given the sad state of the construction industry in Florida.

Since 2007, when the recession first struck, home builders across the country have seen a dramatic decrease in demand for their services. In recent months, the industry has seen something of a revival, but this wasn't enough to save Paradise Homes.

Sources note that Paradise Homes is currently building at least two dozen homes in the Tampa Bay area, and the company's decision to file for Chapter 7 bankruptcy leaves these homeowners with a great deal of uncertainty.

If Paradise Homes is unable to finish these projects, other companies will likely step in to complete them at an extra cost, according to sources.

Predictably, some homeowners who hold contracts with Paradise Homes are reportedly "angry" about the situation, but the company has shown no signals that it plans to ignore the warranties that its customers have on their custom homes.

Still, Butler and Paradise Homes could face some legal hassles from unhappy customers. The company is already facing a $15,000 lawsuit for an alleged breach of contract.

Of course, by filing for bankruptcy, Paradise Homes will be able to temporarily postpone this lawsuit while it works to repair its financial troubles.

And the company certainly has its work cut out for it. Sources say its bankruptcy filing lists at least 200 creditors. These entities include contractors, home buyers, and former employees of Butler's company.

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