Battlefield Builders Inc., a Prince William County developer that has been struggling for weeks to ward off bankruptcy, is virtually closed down and most work on its projects has ceased, according to an attorney for Battlefield's largest creditor.
In addition, at least one of the company's 10 lenders is foreclosing on some of the approximately 200 Battlefield homes still under construction, according to Michael R. Vanderpool, who represents the construction-materials firm Lowe's. Vanderpool also heads a committee composed of representatives of the development company's creditors.
A foreclosure sale of 26 partially completed homes in Chestnut Run, a Battlefield development in Loudon County, is planned by Suburban Savings and Loan Association in Annandale, according to Thomas J. Cavuto, an attorney for District Realty Title Insurance Co.
Telephone calls to Battlefield's office in Manassas were not answered. Brothers James and Harry Ghadban, president and vice president of the company, respectively, have unlisted residential telephone numbers, and Mary Ann Ghadban, Battlefield's vice president for sales and marketing, does not have a residential listing in Manassas. The developer's attorney, Ronald L. Walutes of Annandale, did not return a reporter's calls.
Battlefield, which has been building homes in Northern Virginia for a decade, owes an estimated $25 million to about 100 banks, savings and loan institutions, subcontractors and suppliers, Walutes said last month. Representatives of the creditors, the developer and of District Realty Title have been trying for more than a month to devise a plan that would enable the builder to pay its debts and avert bankruptcy, but the negotiations were at a stalemate until late this week, Vanderpool said. Now, "there was a development in negotiations that's going to warrant further evaluation and discussion," he added.
The title company guaranteed payment for contractors' work done between Nov. 19 and Dec. 5 in order to give the committee time to reach an agreement; it extended the deadine to Dec. 21, but would not give another extension, he said.
Battlefield's creditors "are still hopeful" and "still willing to talk" about an overall solution, Vanderpool said. But he said he feels an overall settlement is unlikely now and he is planning to form a "consortium" of the creditors' attorneys for the "coordinating of litigation efforts" if the case goes into court.
District Realty Title did not extend its payment guarantee beyond Dec. 21 because of the stalemate in negotiations, said Thomas J. Cavuto of Alexandria, one of the title firm's attorneys. "The creditors are looking for the title company to put in a tremendous amount of money . . . and there is no obligation on their District Realty's part" to provide so much, he said.
He said he "wouldn't call the negotiations at a stalemate right now" because of the "possible proposal that would satisfy everybody" that was being discussed late this week."
He said that after the Chestnut Run foreclosure sale takes place, "I think we will know a great deal more . . . " about the fate of Battlefield and its creditors, he said. "I think there will be movement one way or another."
Cavuto, who is with the law firm of Thomas & Fiske in Alexandria, said "now that people homeowners can't call Battlefield, they're confused and don't know who to call. We can probably give them information."
The number of mechanic's liens being filed on Battlefield-built homes by subcontractors and suppliers is growing, according to Vanderpool, who said he has filed notices of the liens on more than 150 houses on behalf of his client, Lowe's. A mechanic's lien asks a court to order sale of the property to pay the debt, leaving the homeowner the choice of paying the bill or losing his house. The owner can then sue the builder who incurred the debt, but a mechanic's lien usually is filed because the builder cannot pay, said an attorney. In practice, courts rarely order sale of a home unless the lien is very large, he said.
The evidence produced with a lien helps establish a creditor's claim, and "it is unlikely that any subcontractors who do not secure their positions by mechanic's liens will receive any funds" that might be disbursed as a result of any settlement or foreclosure proceedings, Vanderpool said.
Revelations of the massive debt and complaints from homeowners that Battlefield has not completed roads and other work in several subdivisions, failed to honor warranties and make repairs prompted Prince William County supervisors last month to ask for a state investigation of the development company. Several owners of Battlefield homes said they feared the company's financial troubles may mean the work will never be done.
An "information meeting" for homeowners will be held at 7 p.m. Thursday in the county board chambers "to bring the citizens up to date on everything" affecting their homes, according to Supervisor G. Richard Pfitzner.
Pfitzner said the board this week asked companies holding three bonds totalling nearly $300,000 to pay for road work, covered by the bonds, that Battlefield has failed to complete. The bonds affected street improvements in Crestwood Village, Fernbrook and Minnieville Manor developments. Pfitzner said, however, that "it will be probably at least several months" before the work will be completed.
Battlefield, once Prince William's biggest developer, has been drawing complaints and lawsuits in recent years. Nearly 20 suits have been filed against the company since 1980, most by subcontractors and suppliers, and at least eight are still in court. Two of the legal actions, however, are being pursued by Prince William County, which is asking for $24,564.54 from Battlefield to cover water damage in offices the county leases from the developer. In the other suit, the county is trying to force Battlefield to clean up an illegal trash dump in one of its developments, Riverview Estates near Manassas.