The filing for protection cites “deterioration of the real estate climate” and the lending crisis.
Express Financial Services Inc. produced $65 million and $45 million in revenue 2005 and 2006 respectively, but by September, it didn’t have enough business to continue profitable operations, documents filed in U.S. Bankruptcy Court in Pittsburgh show.
The Green Tree-based title and appraisal services firm, which with little warning suddenly closed its doors on Sept. 14, filed for bankruptcy protection from creditors late Wednesday.
The company’s closing cost the jobs of about 100 workers — down from a peak of 400 to 500 several years ago.
In addition, it left dozens of private contractors across the country who did with the Express Financial with unpaid debts in the thousands. For example, Brenda Schroeder, a St. Louis-area appraiser, said her firm is owed more than $15,000 for three months’ work.
Express Financial in its bankruptcy filing did not yet provide a detailed accounting of its total liabilities and assets.
But it offered a list of the 20 largest unsecured creditors, showing they are owed amounts ranging from $21,945 to $800,000. Its total number of creditors exceeds 12,440, court documents say.
“Deterioration of the real estate climate together with the subprime lending market crisis compounded the debtors ability to operate profitably,” say documents submitted to the court by Campbell & Levine LLC, a Downtown law firm representing the company.
Express Financial had suffered a blow in September 2006, when a major customer, Chase Manhattan Bank, said it would stop doing business with the company, documents said. The company believed it could “minimize” the impact from what would be a “significant reduction in gross revenues” from Chase by increasing business from existing customers and attracting new business.
After analyzing and discussing potential options in September, however, the company “determined that there was no foreseeable return to profitability under the present and foreseeable economic conditions.”
Morton H. Lowe, a Mt. Lebanon resident, has the largest unsecured claim against the company, valued at $800,000, documents showed.
Lowe, whose debt is listed as a “stock redemption claim,” could not be reached for comment Friday.
Others with major claims include Stewart Title Guaranty Co. of Houston, at $132,299.77; Greentree Parkway Associates of Green Tree, at $104,000; and the accounting firm of Kramer Thompson & Associates of Green Tree, with $91,979.12.