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Unspecified assets have been found to repay creditors owed millions by a bankrupt Kennewick home builder.
John Munding, the trustee handling the Chapter 7 liquidation of Solferino Homes, also known as M|S Homes, has recovered assets to repay creditors of the former Parade of Homes builder, according to a recent court filing.
Solferino Homes specialized in custom-built Mediterranean-themed villas. Its homes were showcased in several editions of Parade of Homes, the annual showcase of luxury homes held each September.
The bankruptcy trustee has not disclosed the nature and value of the assets that have been recovered. It is promising news for the company’s unsecured creditors who were initially told there was no hope of recovering more than $7 million.
The newly recovered assets could provide partial to full repayment of debts, depending on the amount.
Creditors have until Sept. 11 to file proof of claims with the court.
Solferino Homes, owned by Nicole and Marco Solferino, of West Richland, sought protection from creditors by filing for bankruptcy on March 13. Marco Solferino previously filed for bankruptcy in 1997 in Western Washington.
His current case is pending before Judge Frank Kurtz of the Eastern Washington district.
Debt tops $9 million
The company initially listed $1.1 million in assets, chiefly real estate, and more than $9.2 million in debt.
Nearly $7.4 million of its debt is unsecured, money owed to home buyers, lenders, vendors and subcontractors who performed work on its projects. Several home buyers are owed hundreds of thousands of dollars for homes that were never built or were incomplete.
In its March bankruptcy petition, Solferino Homes advised creditors to not file claims, saying there would be no assets to repay unsecured debts.
“Since that notice was sent, assets have been recovered by the trustee,” the notice to creditors says.
It is unclear what assets Munding has recovered. The Spokane-based trustee could not be reached to elaborate.
Searching for assets
The Solferino Homes bankruptcy petition has not been amended. The electronic case file does not appear to contain an updated list of assets.
However, Munding indicated he would take a deep look into the personal and business finances of the Solferinos and their company when he asked probing questions at the initial creditors meeting, held April 30 in Richland.
Under oath, Marco Solferino said he had spent $1.2 million in customer deposits, though he did not say how it was spent. He also said he paid himself $130,000 in 2018 and took another draw of $30,000 on Feb. 14, 2019.
Creditors had a second chance to confront Marco Solferino on June 11. A June 13 note in the court file indicated Munding was not submitting a report “at this time.”
The Solferinos’ primary asset appeared to be their 4,600-square-foot home on five acres on Sand Hill Drive in West Richland. It was not included as an asset of the bankruptcy.
Benton County property records indicate the Solferinos still own the property.
County records value the 2016-built home at nearly $600,000. Zillow, the online real estate platform, places its value at $1.2 million.
Solferino Homes is represented by Kennewick attorney William Hames, who could not be reached.