Minnesota Builder Reportedly Stiffing Subs; At Least 4 Have Six-Figure Claims Against Parish Marketing

(original post 10-28-07)
Part of the fallout of the collapse of Twin Cities-area homebuilder Parish Marketing and Development, owned by Michael Parish, is the devastating effect it is having on the subcontractors who did work for Parish who are owed significant sums, but are now in the process of being royally stiffed by the builder. Up until now, media articles have reported that homebuyers purchasing vacant Parish homes under land contract and "rent to own" arrangements have been stiffed in that Parish reportedly pocketed all their money without applying any of it to the mortgages on the homes they were purchasing.

Now, according to a recent story in the Minneapolis Star Tribune, at least four contractors are owed six-figure sums for construction work they did for Parish and the chances of recovery of even some part of the amounts owed are not good. Excerpts from the story:

• The Parish case, one of a string of mortgage-fraud schemes surfacing across the Twin Cities area and the nation, highlights the extent of much damage a single builder can create. For example, [Brian] Jones [owner of North Oak Enterprises Inc. of Wyoming, Minn., an interior trimming contractor], who says he's owed $45,000, expects to lay off his three employees next month -- his first layoff in 17 years of business. And Kyle Elfering, the owner of a small framing business in Stacy, Minn., said he's already laid off half his workforce since Parish stopped building. He's seeking $230,000 in back pay from Parish.

• [Brad] Alness [owner of Phase Electric in Bloomington] said it will take years to recover the $298,000 in unpaid bills from Parish. "That represents more than all of our profits for the entire year," he said. "It's huge." Twice this past year, builders have failed to pay Pamela Jewison, co-owner of Allied Excavating, for work on area homes. Her unpaid bills: $155,000. Her complaints to the Minnesota attorney general's office have been unanswered, she said. "We're talking about people's lives here," she said. "There are people out there who won't be able to survive this."

• Several contractors said they were lured by promises of steady work as other builders were scaling back. In just four years, Parish built 125 homes at "Prague Estates," a project in New Prague. Most of those homes are in foreclosure, according to Le Sueur County officials. Brian Jones, the trimming contractor, recalls a meeting last year with [Parish son-in-law, Christopher] Troup. "He said, 'I'll have 100 houses a year for you guys to do,'" Jones said. "In this market, that was salvation."

• At least four contractors said Parish owes them six-figure sums. Minnesota Concrete Structures said in a recent lawsuit that Parish failed to pay it $692,484.65.

For more, see Parish collapse leaves contractors stuck with unpaid expenses (It may take years for some contractors to recover from the state's largest case of mortgage fraud).

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