Information for Creditors of T M Grace Builders, Inc.
Case Number 22-12026 in the United States Bankruptcy Court for the District of Colorado
THE DEBTOR’S BUSINESS HISTORY
The Debtor, T M Grace Builders, Inc., is a small construction company that provides renovation, remodeling, and complete build services in the Denver Metro area of Colorado. T M Grace has developed a multi-million dollar business despite having only five employees because it has focused on providing quality work while partnering with subcontractors who reduce the burden on the company.
T M Grace has found a niche building custom, million to multi-million dollar homes. As of the filing of the bankruptcy case, T M Grace owned at least four properties on which it was constructing homes to sell. It also has some construction contracts and works on projects outside of the land it owns.
The company has been able to generate millions in revenues each year for the past number of years. Despite its recent cashflow issues, the Debtor intends to continue providing quality custom homes and will continue operations throughout and after its bankruptcy case.
DEBTOR HOPES TO ESCAPE CASHFLOW CRUNCH
The bankruptcy filing on June 6, 2022 was precipitated by serious cashflow issues at T M Grace. Indeed, on the day it filed for bankruptcy, the company reported having only $1,918 in cash in the bank. The lack of cash had two primary causes: COVID-19 and pre-bankruptcy civil litigation.
Like many companies, T M Grace suffered hardships during the COVID-19 pandemic, including rising costs, postponed contracts, and missed payments from its customers, who themselves were experiencing cashflow concerns due to the pandemic. The Debtor was managing to weather the storm until one of its former customers filed a civil lawsuit.
The Debtor defended the civil case by 460 Adams LLC initially, but the case drained the Debtor’s resources to the point where it missed several payments to other creditors. The situation snowballed to the point where multiple other creditors had taken collection actions, including garnishments, against the Debtor. It filed for bankruptcy to effectively manage its debts and try to reorganize.
WHAT DOES THIS MEAN FOR UNSECURED CREDITORS?
Without the bankruptcy filing, the Debtor would likely have been completely drained of all cash and closed its doors. Through the bankruptcy case and the operation of bankruptcy laws, the Debtor instead plans to reorganize its debts, make a plan to pay at least some amount to its creditors, and be able to continue operations for years to come.
Since the Debtor was so cash-poor when it filed the bankruptcy case, it will obviously take some time for the company to build back up some funds that it can use to pay creditors, continue its business operations, and satisfy all of its future debts as they arise.
Bankruptcy provides a mechanism called a committee of unsecured creditors that can allow unsecured creditors to advocate for their rights to be paid without having to pay lawyers out of their own pockets. This tool can be useful in a case like T M Grace where it looks like the potential for repayment is small, because it gives creditors better bargaining power. If you have any questions about this page or the T M Grace bankruptcy, please contact PRLT.
PRLT does not represent T M Grace Builders, Inc. or any of its affiliates. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the T M Grace bankruptcy case or anything discussed on this page, please contact us.