Maryland - Catalina Builder Went Under and it Seems they are Leaving Customers to Fend for Themselves

[JamesW]

It's really not that hard to find reviews.

Licenses are harder to find but still findable.

Court cases also are online and can be looked up.

The Google reviews are brutal.

Google, Yelp, BBB etc. are all easy to search and find.

A simple Google search with the name and city pops up most data.

 

[JoyfulNoise]

It would not surprise me if they don't file bankruptcy and just let the creditors get a disconnected phone. Since it is an LLC they are not personally liable. So I believe they can just walk away and let any creditor or customer sue the company which will have no assets anyway. I used to work for a guy that set up a holding company above his other LLCs so that if one of them was doing poorly he just disconnected the phones after he robbed it blind.

While that is a strategy for avoiding bankruptcy it is not bulletproof. A person in that situation can still be sued and then disclosure can be used to force the records of those bogus shell companies into the light. Judges do posses the authority to ignore the structure of these arrangements and still assign liability if there is gross abuse going on. As well, the State AG can get involved and file criminal charges against people that do these sorts of things.

It all depends on how mad you make someone and how much of their time and energy they are willing to expend on making the offending party pay.

 

[JoyfulNoise]

It's really not that hard to find reviews.

Licenses are harder to find but still findable.

Court cases also are online and can be looked up.

The Google reviews are brutal.

Google, Yelp, BBB etc. are all easy to search and find.

A simple Google search with the name and city pops up most data.
View attachment 460248

Perhaps you should give a TED Talk on how to effectively hunt down loser contractors and expose them …

Or better yet - write a TFP Wiki article on how to track down losers.

 

[JamesW]

Judges do posses the authority to ignore the structure of these arrangements and still assign liability if there is gross abuse going on.

A well crafted layered defensive asset protection structure can be quite difficult to penetrate.

Assets can be hidden in trusts and other legal entities like LLCs in places with confidentiality laws where it is difficult to track down who owns or controls what.

The LLC is owned by a trust, which is owned by a different LLC which is owned by a trust etc.

Assets can be transferred to other people like family members and that makes it more difficult to recover and you would have to show that the transfer was intended for fraudulent purposes.

It’s like an endless series of Matryoshka dolls where every time you look, there’s another doll inside.

 

[JamesW]

Some states have a contractor’s Recovery or Guaranty Fund

1. What is the Guaranty Fund?

The Maryland Home Improvement Commission administers a Guaranty Fund, which exists to reimburse homeowners for the actual loss caused by a licensed contractor who performed a home improvement job in an unworkmanlike, incorrect, or incomplete manner, or who abandoned a home improvement job. The Fund is supported by licensed contractors, who pay a Guaranty Fund assessment when they obtain their home improvement license and each time they renew the license.

Guaranty Fund Frequently Asked Questions (FAQs) - Maryland Home Improvement Commission (MHIC) - Division of Occupational and Professional Licensing

www.dllr.state.md.us

In addition, some contractors have a bond that might cover losses.

Some states require a bond for certain contractors.

 

[JoyfulNoise]

A well crafted layered defensive asset protection structure can be quite difficult to penetrate.

Assets can be hidden in trusts and other legal entities like LLCs in places with confidentiality laws where it is difficult to track down who owns or controls what.

The LLC is owned by a trust, which is owned by a different LLC which is owned by a trust etc.

Assets can be transferred to other people like family members and that makes it more difficult to recover and you would have to show that the transfer was intended for fraudulent purposes.

It’s like an endless series of Matryoshka dolls where every time you look, there’s another doll inside.

Even in these circumstances, if fraud is being committed, judges can order these entities to be audited and prosecutors can use legal discovery processes to force disclosure. A good accountant will quickly figure out the games being played. A person can only hide so much until a judge orders disclosure. If they refuse, then contempt of court comes into play and criminal indictments can happen. State laws regarding trusts and LLC’s are there to protect LEGAL businesses and individuals from harassment and nuisances, they are not intended to allow ILLEGAL behavior to be hidden. Trust laws vary by state but judges can easily overcome those laws if criminal activity is alleged.

 

[JamesW]

It’s still a tremendous amount of time, money and effort that will cause most people to give up.

It’s all about cost vs. potential benefits and the likelihood of actually recovering the assets.

First, you have to actually prevail in a lawsuit and then, if you get a judgment, you have to try to collect.

I’m not saying that it can’t be done, I am just pointing out how most people will give up before they actually collect anything.

I did sue them for $3k worth of grading I had to have done to pass final county inspection but they managed to evade service because their registered agent address was not valid.

I dropped the case after that it wasn't worth my time to pursue.

 

[JoyfulNoise]

It’s still a tremendous amount of time, money and effort that will cause most people to give up.

It’s all about cost vs. potential benefits and the likelihood of actually recovering the assets.

First, you have to actually prevail in a lawsuit and then, if you get a judgment, you have to try to collect.

I’m not saying that it can’t be done, I am just pointing out how most people will give up before they actually collect anything.

Unless you’re @Dirk … then the bulldog never lets go of a bone ….

 

[JamesW]

In theory, a civil suit is supposed to address inequities.

In practice, it is a slow, horrible process that takes way too long, it creates too much stress and it costs too much to be useful in most cases.

 

[JamesW]

Unless you’re @Dirk … then the bulldog never lets go of a bone ….

Yeah, you don't want to mess with @Dirk.

 

[ajw22]

.

Yeah, you don't want to mess with @Dirk.

View attachment 460271

That is one of his more flattering pictures.

Do you name all your dogs after TFP personalities?

 

[JamesW]

That's a picture of @Dirk when he likes you.

You don't want to see the picture when he does not like someone.

 

[kimkats]

Also ask @Dirk how many times he came close to stopping the process. It hard on him in terms of time and mental effort. He did prevail and got it done AND got his money!! yeah don't mess with

 

[JamesW]

Since it is an LLC they are not personally liable.

"Limited" liability does not mean no liability.

There is a term called "Piercing the corporate veil" that means that the owners and operators can be held personally liable under certain conditions.

For example, fraud or other malfeasance can result in personal liability.

Several of the complaints seem to suggest that the complainant is at least suggesting that there was illegal conduct involved.

Two quotes say that the owners should go to jail, which is a pretty clear indication that the person feels like the conduct was probably illegal.

 

[JamesW]

Piercing the Corporate Veil

www.law.cornell.edu

 

[JoyfulNoise]

"Limited" liability does not mean no liability.

There is a term called "Piercing the corporate veil" that means that the owners and operators can be held personally liable under certain conditions.

For example, fraud or other malfeasance can result in personal liability.

Several of the complaints seem to suggest that the complainant is at least suggesting that there was illegal conduct involved.

Two quotes say that the owners should go to jail, which is a pretty clear indication that the person feels like the conduct was probably illegal.

Given the scope of the failure and the number of property owners possibly affected, it would not be at all unreasonable to report this to the various county attorneys in the affected area as well as the state attorney general. There’s a lot of very state specific contract and consumer protection laws at play here and if the business owner violated any of those, the attorney general could consider criminal charges. Once an investigation is opened, other subcontractors and suppliers might come forward to attest to improprieties. It also sounded like there was some contractual employment by that guy that did sales and customer interface for the builder and he wasn’t paid properly. Employment law is also pretty complex so if they were paying that guy off books somehow and not properly accounting for his work (ie, payroll tax avoidance) then the owner could be on the hook for tax evasion. There’s also very specific rules for owners and partners on how much profit sharing can happen, etc, etc. It sounds like the owner tried to keep everything in his family which can get real complicated real fast.

 

[JamesW]

When you read the email that the builder sent out, the tone is angry and bitter and they take absolutely no responsibility for the failure of the company.

They say that they did everything they could and they blame everything on external forces.

A refusal to take responsibility for anything has probably been a significant contributor to their failure.

Every problem is blamed on subcontractors, suppliers, the weather, Covid, sunspots, global warming, unspecified and unforeseen circumstances blah, blah, blah.

Anything and everything except for anything that is their responsibility.

 

[guinness]

There's also Sunrise Premiere Pool Builders, LLC at a nearby location in MD that is registered with the same family name.

 

[Bperry]

When you read the email that the builder sent out, the tone is angry and bitter and they take absolutely no responsibility for the failure of the company.

They say that they did everything they could and they blame everything on external forces.

A refusal to take responsibility for anything has probably been a significant contributor to their failure.

Every problem is blamed on subcontractors, suppliers, the weather, Covid, sunspots, global warming, unspecified and unforeseen circumstances blah, blah, blah.

Anything and everything except for anything that is their responsibility.

Debt is always a big factor in these kind of failures. Also can’t run a business like a pyramid scheme and expect it to last.

 

[JamesW]

Also can’t run a business like a pyramid scheme and expect it to last.

My financial adviser, Mr. Ponzi would disagree with that.