Unfinished houses, open roofs: RJ Construction customers take their claims to bankruptcy court

Unfinished houses, open roofs: RJ Construction customers take their claims to bankruptcy court

Christina Ridings says she had doubts about hiring RJ Construction. She had spent half a year vetting contractors to remodel her home’s balcony and lower deck when she came across the group. However, she was heartened by the community outcry on Jordan’s behalf.

For months, plastic yard signs across Arlington demanded AISD “pay RJ.” Jordan, flanked by employees and friends, protested outside the school district offices months after he dried out Sam Houston High School during the February 2021 winter storm.

“I just felt like, ‘OK, here’s a hometown guy that big businesses just kind of bullied,’” Ridings says. “We love to try and support local communities.”

She and her husband paid $38,000 over the summer. In early August, Jordan asked for an additional $10,000 to start the roofing. By the end of the week, Ridings learned RJ Construction shuttered all three offices.

Jordan filed for Chapter 7 bankruptcy Aug. 9 in the Northern District of Texas U.S. Bankruptcy Court. The filing implicates 190 possible people and entities whom Jordan may owe money—however, several more who were left unlisted claim they were left high and dry as well.

Ridings says in addition to being without a roof and out nearly $50,000, she has struggled to find other contractors willing to pick up the project because of its association with Jordan.

“When he cried out to the community, the community responded to him in-kind,” Ridings says. “They said, ‘Oh, here’s a guy who’s suffering—appeared to be suffering—and they got behind him. People hired him left and right to support the local guy.”

Jordan and his attorneys have not responded to multiple requests for comment. However, in an email sent to customers Aug. 9 obtained by KERA News, Jordan contends he “did everything possible” to save the business and did not believe he would be at risk of filing for Chapter 7—a liquidation filing that indicates a business is closing for good—until then.

However, former customers and AISD attorneys claim there were indications Jordan’s financial situation was taking a turn for the worse months earlier.

Michael Hammond, who was employed as special counsel to Jordan’s trustee, says in an emailed statement AISD’s assertions are the “latest, and most desperate, attempt to avoid paying what they owe”.

Motion claims Jordan ‘kept taking’ money

Travis Hyden says he knew Jordan’s company would be the right fit to help his mother rebuild after a February electrical fire razed her Rendon home. He’d known Jordan for 30 years and says Jordan assured him the ongoing lawsuit wouldn’t get in the way of business.

“From personal conversations I had with him, everything seemed to be OK,” Hyden recalled.

He and his mom, Suzanne Hyden, paid the company $115,000. The only thing to show for it on the lush, green property is the subcontractor’s work to remove the rubble. Around the foundation, a set of dismounted stairs and a children’s play set are the only indications someone once lived on the property.

Attorney Dennis Eichelbaum, whose firm Eichelbaum Wardell Hansen Powell & Muñoz represents AISD, says in a motion filed Sept. 2 that Jordan and his attorneys were considering filing for Chapter 11 bankruptcy around the same time the Hydens solicited RJ Construction.

“The bankruptcy did not begin until August of 2022, and for six months Robert Jordan Construction kept taking customer’s money,” the filing reads, pointing to Hyden’s February $115,000 deposit.

Eichelbaum’s firm accounts for three of six claims against Jordan’s company in bankruptcy court. They claim Jordan owes attorney’s fees for AISD administrators listed as defendants in the original lawsuit filed in June 2021. The firm has argued throughout the case in Tarrant County District Court and the Texas Second Court of Appeals that the two administrators should be dropped from the case before they agree to mediation.

The case was stayed Aug. 15 pending bankruptcy proceedings.

Jordan referred to one of the firm’s filings Sept. 10, 2021, that says the district would otherwise only move to mediation whenever the district exhausted appeals options and then only if Jordan “has not lost everything.”

“To be clear, RJ Construction’s demise was a direct and calculated goal of The Arlington AISD,” Jordan wrote in his Aug. 9 email.

Two men in baseball caps wear white shirts that say "RJ Construction" in blue lettering. In front of them, a sea of friends and family of Robert Jordan wearing blue RJ Construction shirts fill the plaza outside Arlington Independent School District's administrative building, which is surrounded by trees. In the far background, people hold signs that say "Pay RJ."

Kailey Broussard

/

KERA News

A crowd of people wearing RJ Construction shirts protest outside Arlington Independent School District’s administrative building at 1203 W. Pioneer Parkway Oct. 14, 2021. Robert Jordan, who headed the company, alleged in a lawsuit that AISD did not pay his firm the full cost of repairs to Sam Houston High School following Winter Storm Uri.

Arlington ISD claimed in a fact sheet published earlier this year that an insurance adjustor valued RJ Construction’s work at around $180,000, rather than the $1.245 million the company billed them for in March 2021. The district cut Jordan a check, it claims, but Jordan never deposited the funds.

Eichelbaum in the Sept. 2 filing also opposes hiring Michael Hammond, Jordan’s attorney in the original lawsuit. Eichelbaum claims the legal strategy and the legal fees’ contributed to the bankruptcy.

“(Hammond) has been aware that his client was facing impending bankruptcy yet permitted his client to continue accruing debt and accepting payment for services his client would never perform,” he wrote.

In an emailed statement to KERA News, Hammond says he believes the motion is baseless and denies Eichelbaum’s claim that he “somehow aided him in breaking any laws or have any conflict that would prevent me from representing the bankruptcy estate in this matter.”

“Mr. Eichelbaum simply doesn’t want me representing the bankruptcy estate because he has already lost to me at the trial court and knows I will be steadfast in holding the AISD responsible for their conduct,” Hammond says.

Recovering money unlikely

Customers stiffed out of construction money are typically last on the list for payouts, says Jeff Prostok, a partner with Forshey Prostok. They fall behind people or businesses with liens against company assets.

“In these Chapter 7 construction cases, unfortunately, it’s very unlikely that there will be anything for unsecured creditors such as these folks,” Prostok says.

Nevertheless, he encourages creditors to listen to proceedings and speak up during sessions like the hearing scheduled Tuesday. During the hearing, creditors will have the opportunity to ask Jordan questions, and Jordan’s trustee will interview him about the company’s financial situation.

“I encourage creditors to, if nothing else, listen to the proceedings just to hear what the debtor has to say or why they’re in the situation that they’re in,” Prostok says.

Former customers have organized and gathered stories through social media from people who claim RJ Construction left them high and dry. The Facebook group RJ Construction Victim Hotline has accrued nearly 500 followers and a bevy of liquidation bankruptcy resources.

Josh Usry says he knows he and others will not get money back. However, he intends to organize and demand accountability.

Usry hired RJ Construction to renovate his kitchen, create a master bedroom and build a laundry room. However, the project started months behind schedule. The company found structural issues after beginning demolition that previously went unnoticed. Usry and his wife ended up selling the house and were forced to live out of an AirBnB.

“(Jordan) stole $30,000 from me,” Usry says. “I need to at least entertain myself for $30,000 worth of time.”

He and other customers have filed police reports with local agencies.

Tim Ciesco, an Arlington police spokesperson, confirmed the department received multiple reports about unfinished yet paid-for construction projects in an emailed statement. He added that the department’s Economic Crimes Unit was working with the Tarrant County District Attorney’s office to determine whether the case was a criminal or civil matter.

Tarrant County DA spokesperson Anna Tinsley Williams did not confirm the status of the cases when asked and directed KERA News to the clerk of court’s office. The court’s office asked for a records request, which did not return any information on the cases.

Travis Hyden says he hopes the outcry, especially after a public spat with the school district, emboldens lawmakers to put up more guardrails for customers.

“Regardless of any criminal restitution or any civil pending cases, we probably won’t get anything out of it. Hopefully we can get some justice on the criminal side of things, at least maybe have the state of Texas pay attention here and maybe start looking at reform for contractors to try and protect some consumers,” Travis Hyden says.

Got a tip? Email Kailey Broussard at [email protected] You can follow Kailey on Twitter @KaileyBroussard.

KERA News is made possible through the generosity of our members. If you find this reporting valuable, consider making a tax-deductible gift today. Thank you.


https://www.keranews.org/business-economy/2022-09-12/unfinished-houses-open-roofs-rj-construction-customers-take-their-claims-to-bankruptcy-court

Which home renovations — new roof, kitchen update — get the best returns? Previous post Which home renovations — new roof, kitchen update — get the best returns?
31-Year-Old With 40 Rental Units in 2.5 Years Next post 31-Year-Old With 40 Rental Units in 2.5 Years