Judge tosses concrete contractor's bankruptcy case

A federal judge has dismissed a Chapter 11 bankruptcy petition filed by a Springfield concrete contractor who failed to furnish the court with monthly operating reports and past tax returns.

Poppenga Concrete Inc. owner David Poppenga filed the voluntary petition in U.S. Bankruptcy Court last September, listing the company's estimated liabilities between $500,000 and $1 million.

Some of Poppenga's largest creditors were regional concrete suppliers, according to the petition, which listed combined debts of more than $214,000 to Conco Cos., Joplin-based G&H Redi-Mix and Barry County Redi Mix. Other creditors included Rock Solid Solutions LLC and Pyramid Roofing Co., both based in Springfield.

But on March 12, Bankruptcy Judge Arthur Federman dismissed the case for reasons raised by the U.S. trustee overseeing the case and the Internal Revenue Service - and because Poppenga was not believed to have any unencumbered assets, court records show.

According to a motion filed by the trustee Feb. 27, Poppenga did not comply with a court order to file a disclosure statement and plan by Jan. 22. He also failed to file required monthly operating reports for December and January. Debtors in possession are required to provide bankruptcy trustees with monthly operating reports by the 15th of each month, court records show.

At a Nov. 5 creditors meeting, an attorney for the U.S. trustee requested that Poppenga submit certain documentation pertinent to the case, but he never complied. Among the documents he failed to produce were tax returns for 2006 and 2007; financial statements for 2006 and 2007; and voided imprinted checks for his debtor-in-possession bank accounts, court records show.

Furthermore, Poppenga hasn't paid quarterly fees to the trustee, who is owed an estimated $5,200 for services rendered in the fourth quarter of 2008, court records show.

The IRS, which filed an amended claim totaling $176,638 against the concrete company in January, alleged in court documents that Poppenga used cash collateral without court authorization.

"A review of the debtor's bank records show(s) expenses to Price Cutter, Campbell 16 Cinema, Family Video, Sonic, Barnett Family Dental, Smoothie King, Party America, Dillards, Kohl's, Macy's, Honeybaked Ham and Yankee Candle, as examples of expenses that do not appear to be in the ordinary course of business," according to a motion filed by the IRS in February.

The IRS also said in its motion that Poppenga failed to make federal tax deposits for January and the fourth quarter of 2008.

Poppenga also faces two individual federal tax liens filed by the IRS in 2007 and 2008 for claims totaling more than $800,000.

Brent Hendrix, a Springfield attorney who represented Poppenga Concrete in the Chapter 11 filing, did not return calls seeking comment.

Rare occurrence

Attorney Tom O'Neal, managing partner of the Springfield office of Polsinelli Shughart PC and a panel trustee for the U.S. Bankruptcy Court for the Western District of Missouri, estimates that less than 10 percent of voluntary bankruptcy cases are dismissed due to a petitioner's lack of cooperation.

He said some businesses that file for Chapter 11 bankruptcy just can't afford the costs associated with the court-administered reorganization.

"In smaller business Chapter 11s, you've always got the lack of adequate capital," O'Neal said. "And in a lot of them, you will see a lack of adequate recordkeeping. ... You got to have some capital to get through bankruptcy, so it's a difficult situation."

Liens pile up

An involuntary Chapter 7 bankruptcy petition filed last October against Elegant Homes and Design of the Ozarks LLC - a home building business Poppenga owns - is pending. That case was filed by creditors Trimworks Lawncare, B&G Drafting and Insulation of the Ozarks, court records show.

Springfield attorney David Fielder represents clients Conco and Brundage-Bone Concrete Pumping Inc., two companies that have filed dozens of mechanic's liens against Poppenga Concrete and Elegant Homes in Greene County Circuit Court since 2007. Fielder, with Lowther Johnson Attorneys at Law LLC, said Federman's decision to dismiss Poppenga Concrete's petition was a "positive turn for creditors," and he's hopeful the judge also will toss the Elegant Homes petition.

"Our real hope for payment - and I think we have every reason to believe we're going to get paid - will lie more with Elegant Homes, owner of the real estate," Fielder said. "Every one of these lots out there is going to serve as security for our lien claims."

He added, "The key for not only Conco, but all these lien claimants, is the ability to achieve priority over any lender that may have (provided) construction financing. Often, the practical result is that the banks will negotiate a settlement with the lien claimants to clean up the title."[[In-content Ad]]