A small Denver homebuilder has filed for Chapter 11 bankruptcy after a string of lawsuits.
TM Grace Builders, a five-person company founded in south Denver in 2011, has $7.1 million in assets and owes creditors $6 million, according to a July 29 bankruptcy filing.
Documents filed by the company in bankruptcy court paint the picture of a moderately successful builder of multimillion-dollar custom homes that was hit by back-to-back hardships: first the pandemic, then a costly lawsuit by a former customer.
A home owner claimed in its 2020 lawsuit that after it hired TM Grace to build a house at 460 Adams St. in Denver, TM Grace used double-billing and other shady accounting tricks. Confident it would win in court, TM Grace spent more than $250,000 on its legal defense, Anton Shafer, the homebuilder’s owner and president, said in an affidavit June 13.
But in February, a Denver judge instead sided with the Adams Street homeowner and awarded it $650,000. Financially strained, TM Grace couldn’t pay its other creditors. The lawsuits multiplied and with them came garnishments that further bruised the company’s finances.
A Littleton couple sued, accusing TM Grace of promising to build a house for $750,000, then submitting a budget of $1.3 million and refusing to refund their down payment; the case was settled. A Denver man accused the company of not doing lead testing and then charging him when lead dust appeared; that case was also settled. Four subcontractors sued over unpaid work.
TM Grace and its attorney declined to comment on the bankruptcy. Chapter 11 protection allows businesses to reorganize and keep operating while paying creditors over time.
Most of the company’s assets are in two properties. In Cherry Hills Village, there is a 2-acre lot worth $5.3 million where it is in the early stages of building a 6,000-square-foot farmhouse with seven bedrooms and six bathrooms, according to its website and bankruptcy filings. In Franktown, it is selling a $1.5 million, 5,200-square foot home.
In addition to owing banks, subcontractors and customers it wronged, TM Grace owes Arapahoe County $20,925 and Douglas County $7,582 in unpaid property taxes.