Thursday, April 25, 2002
Erpenbeck brother: I didn't know
New president deals with red ink
By James McNair, firstname.lastname@example.org and Patrick Crowley, email@example.com
The Cincinnati Enquirer
The brother of Northern Kentucky home builder A. William Bill Erpenbeck said Wednesday that he was unaware of the financial imbroglio that has drawn the attention of the FBI and federal banking investigators.
Last month, Jeff Erpenbeck replaced Bill Erpenbeck as president of the Edgewood company that they and other family members founded in 1993. Erpenbeck Co. has come under a barrage of lawsuits by subcontractors, and construction work has slowed, but Jeff Erpenbeck would not discuss the matters under investigation.
It was a surprise, he said of the company's problems.
Two months ago, Bill Erpenbeck was head of Cincinnati's fourth-biggest home builder. Under his leadership, Erpenbeck Co. helped develop at least 20 residential communities in the Tristate, including Steeplechase in Union and Wetherington in West Chester. It had $62 million in sales in 2001.
But at some point, the company's financial condition began to erode. Longtime subcontractors weren't paid for work such as site preparation and plumbing installation.
Buyers made deposits on condominiums that were never completed.
Tuesday, Bill Erpenbeck's problems literally hit home. First National Bank of Northern Kentucky filed a foreclosure suit on his $1.3 million house in Crestview Hills. It alleged that he defaulted on the unpaid balance of $398,655.
The Erpenbeck Co. was founded in 1993 by William Erpenbeck, a third-generation residential developer and builder who left his family's construction business. The company quickly grew into the fourth largest locally based homebuilder, with sales of 436 units valued at $84 million in 2000.|
The Erpenbeck Co. specializes in condominiums, but also has built houses and townhouses in seven local counties, including the following projects:
Belmont Park, Union
Chestnut Park, Miami Heights
Claiborne, Taylor Mill
Erlanger Lakes, Erlanger
The Fairways at Triple Crown, Union
The Fairways at Wetherington, West Chester Township
Fort Mitchell Pointe, Fort Mitchell
Grand Cypress at Legendary Run, Pierce Township
Laurel Glen, Springboro
The Lofts at Wetherington, West Chester Township
Oakwood Lakes, Mason
Pond Creek, Alexandria
The Reserve at Steeplechase, Union
Sherwood Lakes, Mount Zion Road, Boone County
Stonehaven at Aston Oaks, North Bend
Union Village, Union
Wellington Place, Alexandria
The Woodlands at Fowler Ridge, Independence
The aftershocks of William Erpenbeck's fall continue to resonate across Northern Kentucky and in the building industry.
Last week, Peoples Bank of Northern Kentucky, which lent money to the Erpenbeck Co., sent a letter to its 7,000 customers to reassure them that it is sound.
People who had done business with William Erpenbeck for a decade shake their heads at the thought he is under investigation. Until it's proven to me, his track record is what I go by, said Robert Jacobs, owner of a Colerain Township excavation company in his name. The Erpenbeck name's been a good name.
Jeff Erpenbeck said Wednesday that the company is working with lenders to stay in business. Some sites, such as the Chestnut Park project where Mr. Jacobs was doing some emergency grading work, have come to a standstill. But the younger Erpenbeck said the company is still selling and closing on homes.
We're still talking to our lending institutions, trying to restructure our developments, he said. Part of that restructuring is to pay our suppliers and subcontractors.
Such a commitment would hearten vendors such as Tom Lonneman, who owns Lonneman Plumbing in Edgewood. He considers himself a good friend of Bill Erpenbeck, but when Erpenbeck Co. wouldn't pay a $13,912 bill for plumbing work in the Masters Club in Triple Crown, his company sued.
They were always good people, Mr. Lonneman said. I made a lot of money with him, but it just got to be a scary situation.
From the top of his mud-encrusted front-end loader, Mr. Jacobs struggled to assess his feelings. He said Erpenbeck Co. has not paid him since he began site-preparation work a year ago at the Chestnut Park job in Miami Heights. He said he has not asserted his claim by filing a lien or lawsuit.
I'm into it real deep, he said. I've had this money problem with Erpenbeck before, and they've always been good for it. Am I going to bail out? Not until I know what's up for sure.
Subcontractors have filed more than a dozen lawsuits against Erpenbeck Co. in the past year for unpaid bills. That's not a large amount for a big home builder juggling numerous subcontractors and suppliers at multiple developments. But to those subcontractors, the money can represent a big chunk of their revenue.
Covington lawyer Stacey Graus said the filing of liens and lawsuits is no guarantee that subcontractors will be paid.
Banks generally have first priority on proceeds from foreclosure sales of assets, such as real estate. But if the sale amount doesn't exceed what is owed to the bank, he said, there might be no money left to pay unsecured creditors.
The problem is, when you have a large company of this nature where the pieces start to fall apart, it affects everyone, Mr. Graus said. No one's going to walk out of this smiling, probably.
Perhaps Bill Erpenbeck least of all. Jeff Erpenbeck said he spoke to him recently.
He's having a hard time, he said.
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