Looking back over the remains of Ventura-based homebuilder R.W. Hertel & Sons, former partner Bob Fowler wishes he had done things differently.

“I should have liquidated, put it all into bonds and gone home,” said Fowler, who worked for the company from 1993 until it unraveled in June 2008. Instead the firm invested in airplanes, a hotel, a golf course and even a sport fishing boat – but liquidating those still couldn’t save it from plummeting housing prices that crippled the homebuilding industry.

Hertel & Sons, which Fowler estimates built more than 1,100 homes in the Tri-Counties, is being targeted by creditors in an involuntary Chapter 7 bankruptcy that stayed a number of lawsuits, including one in San Luis Obispo County over construction defects. The firm has until late February to say what it has and what it owes.

Ron W. Hertel, Fowler’s partner in Hertel & Sons, didn’t return calls requesting comment.

Fowler, whom state officials declared a nearly $300,000 tax lien against in recent weeks, said the firm stopped doing business last summer and started liquidating what it had left, a result of the crumbling of home values that began in 2005 and choked off credit.

In addition, Fowler said he’s buried in debt and foreclosures for personal guarantees he made with Hertel & Sons.

“This has been a very difficult time for us,” Fowler said. “We had more than 100 employees at one point,” he said, noting that the company closed offices in Stockton, San Luis Obispo and Ventura.

Hertel & Sons had four projects – more than 1,000 slated homes – going before its collapse, Fowler said. A 234-unit development unit near Woodland illustrates the economic forces that did Hertel & Sons in, Fowler said.

In June 2006, Fowler said, the development was appraised at $26 million, and First Bank gave Hertel & Sons a $17 million loan, for a loan-to-value ratio of about 65 percent. In June 2008, the same property was appraised at under $8 million.

First Bank – which didn’t return phone messages requesting comment – asked Hertel & Sons to put up about $7 million to bring the loan back to a 65 percent loan-to-value ratio. Hertel & Sons was ready to put down 10 percent of the money while a partner would supply the rest.

The partner was Lehman Brothers, which filed for Chapter 11 bankruptcy a few months later. “Our only option was to let the bank take [the property],” Fowler said. “I don’t blame them for that.”

Nearly the same thing happened in Eagle Point, Ore., where Hertel & Sons was working to build a $25 million condominium resort near a golf course, Fowler said. Lender Bank of the Cascades took back a property Hertel & Sons had bought for $4 million.

Gregory D.  Newton, chief financial officer of Bank of the Cascades, said nondisclosure agreements prevented him from discussing specifics about the Hertel & Sons loan, but that the bank had limited choices in the deal. “We try and identify the best outcome given all parties to the transaction’s situation,” Newton said. “Every piece of real estate is different. Every situation may be a little different for the same reason.”

Back when times were rosier for homebuilders, Fowler said, Hertel & Sons had put money into an office building and a hotel in Avila Beach, the Sterling Hills golf course in Camarillo and even a handful of jets in San Luis Obispo that Hertel & Sons used to reduce its travel cost. It has also made an investment in the Santa Margarita Ranch, a proposed 111-home development in SLO County.

But when home markets started going south in 2006, Hertel & Sons sold all those interests, Fowler said.

“Those were all investments for us, and as things started to go sideways, they were liquidated to provide cash flow for our main business,” Fowler said.

But Hertel & Sons’ creditors – who say the company owes them $42,000 – think some of the money from all the selling belongs to them.

On Jan. 29, they filed to force the company into Chapter 7 bankruptcy. “Creditors were concerned that assets were liquidated without being applied to their judgments,” said attorney Steven B. Sacks, who’s representing creditor Roger Marlin of Morro Bay.

Finding out where the money went might be tough, Sacks said.

“I’m not sure whether they’re all Hertel & Sons, or whether they’re related entities,” Sacks said of the firm’s possible assets. “It’s very hard to get a handle on how many entities they have. There isn’t a master list, so far as I know.”

Though its schedules have yet to come to the bankruptcy court, Fowler said Hertel & Sons has a few assets left. It has two properties in Woodland that it is in the midst of selling to the city for a park and a school. There’s also a sport fishing boat to be liquidated.

Depending on how the bankruptcy plays out, a trustee might have leeway to look back over Hertel & Sons’ previous transfers and undo them if anything whiffs of hiding assets from creditors.

“They may well have stopped doing business and have moved on to something else, but the question is whether there are assets there,” Sacks said.

But at the moment, Fowler is trying to keep himself out of bankruptcy court and deal with a tax lien that hit him as he was making $20,000 a month payments on his back taxes. He said is working with various banks to pay what he can.

“All the development property has lost its value. That’s where my net worth was tied up,” Folwer said, noting that most of the property was leveraged at 50 percent loan-to-value. “That upper 50 percent that represented my and my partners’ net worth doesn’t exist any longer.”

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