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Matthews Brothers Builders LLC - Residential Home Builder

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2007-10-26

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stories: bizjournals.com, housingzone.com, bizjournals.com

Matthews Brothers Builders LLC, one of the largest builders in Shelby County (Tenn. - includes Memphis), "may be heading toward bankruptcy as lawsuits, foreclosures and liens against the company, its affiliates and its principals are mounting." according to the Memphis Business Journal. The Journal article goes on to note that:

According to real estate research firm Chandler Reports, Matthews Brothers has an inventory of 111 unsold houses in Shelby County. Potential proceeds from the sale of this inventory are about $28 million based on Matthews Brothers' average 2006 home price of $251,000. According to the Shelby County Assessor of Property, there are more than 500 lots -- occupied and vacant -- owned by Mark Matthews, Michael Matthews and their companies. So far this year, Matthews Brothers has sold 93 homes compared with 356 during the full year of 2006 ...

Banks and creditors are starting to pile on the lawsuits. More than 100 liens have been filed against the company. Further to the Journal, "Dec. 1 has been rumored to be a possible date for a bankruptcy filing".

Another Journal article wrote previously on the size of Matthews Brothers noting that Matthews Brothers had homes in 13 neighborhood communities, was founded in 1998 and sold over 400 homes in 2005, which made it the second largest builder in Shelby County.

A Lexis Nexis article writes about Matthews Brothers ongoing troubles noting that their offices were sold in foreclosure in November. It would seem that Matthews Brothers homeowners are unable to reach anyone at the company. It would seem that some of these homeowners live in incomplete communities:

Instead of being in a stable, growing community filled with upper-middle class homes, Daniel is surrounded by undeveloped lots, empty houses and half-built homes.

"I love the house, I just wish I could pick it up and put it someplace else," said Daniel. "I've got snakes coming in my house and rodents coming in my house from the empty lots and from the garbage not being picked up because Matthews would not pay for the garbage collection."

We await confirmation that Matthews Brothers has filed for bankruptcy. If you have any information regarding Matthews Brothers, please let us know.

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Important: This company is on our list of builder operations that have "imploded" (see also ailing lenders). This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid declines in enterprise value; or abnormal "bail-out" by corporate parents or peers in order to continue to operate. The builders may be residential or commercial.