DENVER—Colorado developer and home builder McStain Enterprises Inc. has filed for Chapter 11 bankruptcy protection after struggling with tough housing and credit markets.
The company, which operates as McStain Neighborhoods, filed in federal bankruptcy court Thursday in Denver. It estimated liabilities of $10 million to $50 million.
Co-founder Tom Hoyt said Friday that about six employees will work to complete and sell about 35 homes that are finished or under construction. Homes built or planned under separate partnerships are not part of the bankruptcy filing.
Late last year, McStain closed its headquarters office in Louisville, about 20 miles northwest of Denver, and laid off 75 percent of its staff. It had 17 employees Thursday, down from 120 two years ago.
“It’s really just a darn shame,” Hoyt said of the bankruptcy filing. “It’s a great group of employees, customers and vendors. Our group has an amazing knowledge of green building and the sustainability world, but it’s just not a viable time for us to be able to operate.”
Hoyt and his wife, Caroline, told friends and associates in a letter that McStain had no new net sales from July to the end of last year, home prices have dropped and it couldn’t wait out the economic downturn.
“We are convinced we have reached the bottom. But how long it will bump along at this pace before things improve is no longer something we can afford to find out,” the letter said.
