Bankruptcy official promises deep dive into Tri-Cities home builder’s business

A bankrupt Tri-Cities home builder faced tough questions in one of his first court appearances Tuesday.

Marco Solferino, who owns Kennewick-based Solferino Homes Inc. with his wife, Nicole, answered a series of questions posed by the bankruptcy trustee overseeing the liquidation of his company during a routine hearing in U.S. Bankruptcy Court in Richland.

Solferino Homes filed under Chapter 7 of the U.S. Bankruptcy Code in March. The company listed $9.2 million in liabilities and $1.1 million in assets, some of them with mortgage liens.

The company specialized in upscale homes on the Columbia River in Pasco and the hills of south Richland.

Under oath, Marco Solferino said he spent $1.2 million in customer deposits. He did not say how it was spent.

Although there is little chance that they will recover their money, about 30 creditors, many accompanied by their lawyers, attended the hearing to face Solferino.

His creditors range from landscaping and construction contractors to clients who paid him to build homes, show court documents.

Ongoing struggles

Solferino acknowledged Tuesday his company had problems meeting its financial obligations in 2018 and this year.

Solferino said he paid himself $130,000 in 2018. He took another draw of $30,000 on Feb. 14, 2019.

The money was deposited in his personal account.

Trustee John Munding said he will review Solferino’s personal and business bank account statements going back to Jan. 1, 2018.

Munding also required a list of all real estate transactions for the same period and told Solferino to provide a copy of his 2018 federal income tax return.

The trustee also questioned Solferino about a Feb. 22 transfer of property on Meadow Hills Drive in Richland to a customer through a quit claim deed. The price was well below the $520,000 market value.

Solferino told the court the buyer was the original owner of the land. He had transferred the land to Solferino Homes as part of the construction process.

Munding ordered Solferino to provide all documents supporting his account of the deal.

Looking for answers

Munding’s questions suggest the court is looking for an explanation for the collapse of Solferino Homes, also known as M|S Homes.

The builder specialized in luxury Mediterranean-style villas. It was a regular participant in the annual Parade of Homes tour organized by the Home Builders Association of Tri-Cities.

Marco Solferino previously filed for bankruptcy in Western Washington in 1997, the same year he moved to the Tri-Cities and formed the home building business.

Solferino Homes has indicated there are no assets to sell to fund repayments to the company’s creditors.

Creditors want day in court

Many of Solferino’s creditors left court frustrated on Tuesday because time ran out before they got to speak.

Munding told them that they would have to return for another hearing that has yet to be scheduled.

He continued the hearing, saying he wanted to ensure creditors have enough time to speak. He said he will interview all creditors as part of his investigation.

Creditors are encouraged to contact him at Munding P.S., 1610 W. Riverside Ave., Spokane, WA 99201 or via email, John@mundinglaw.com.

This story was originally published April 30, 2019 at 6:38 PM.