The company that developed Trinity's Townhomes at Cypress Walk filed for Chapter 11 bankruptcy Monday.
Steven Ross Gordon, president of Cypress Walk Developers, said the move was prompted by the economic downturn, which has debilitated the housing market.
"In this current market, we are unable to sell houses," he said. "We are just taking the time out to file Chapter 11 to reorganize and see what's going to happen after the recession is over."
Gordon said the bankruptcy only affects the 112 vacant lots in "phase two" of the townhome project, built along preserved woodlands in southwest Pasco. Gordon's company accepted deposits on phase two properties, but he said Tuesday that all of those funds had been returned.
Of the 26 lots in the first phase of the project, 21 are occupied. Gordon said residents in the occupied townhomes are not affected by the bankruptcy.
"This has no bearing on people who live there because that's run by the condo association," he said.
During Chapter 11 proceedings, Gordon will be able to hold onto all 27 acres in both phases of the townhome project while he works out a plan to repay his creditors. According to the bankruptcy filing, Cypress Walk Developers has $10.1-million in liabilities and $8.3-million in assets.
"We have a very valuable piece of land," he said. "We have to make sure we don't lose valuable assets because of our inability to pay interest."
Gordon has faced financial trouble before. In Pinellas County during the 1980s, his businesses faced multiple foreclosures and lost at least two dozen breach-of-contract lawsuits.
Two years ago, a Palm Harbor couple accused him of duping them in a contract for a townhome at Cypress Walk.
Seventeen months after the couple signed a contract for the townhome, Gordon raised the price by $35,000, saying a builder had the right to "improve his product."
The couple eventually moved to another condominium.
Camille C. Spencer can be reached at firstname.lastname@example.org or (727) 869-6229.