FAIR OAKS, Calif. — Hundreds of people are left feeling hopeless after Anchored Tiny Homes' co-founder filed for Chapter 7 bankruptcy. Now, bankruptcy experts say creditors do have some options.
"This is a very typical Chapter 7 case where the company simply wants to liquidate and not pay the creditors, unfortunately," said Linda Coco of the Bankruptcy Clinic with the McGeorge School of Law.
About two months after Anchored Tiny Homes announced its closure, the company's co-founder, Austin Paulhus filed for bankruptcy. Court records show the company owes more than $12.8M and only has about $1.2M in assets. While these numbers don't look good for people who are owed money, Coco said those that are owed can file a proof of claim with the courts.
"They need to file a proof of claim in the case to have their claim and their identity recognized within the larger Chapter 7. They can file that down at the Eastern District Bankruptcy Court," Coco said.
The filing lists nearly 90-pages of customers impacted by the company, with many of them showing they're owed only $1. ABC10 spoke with dozens of people who said they're owed way more than just a dollar. Coco said the proof of claim is important when assessing what is owed.
"It's just a placeholder. It doesn't mean anything at all. When the creditor files, the proof of claim will be the place where the creditor can detail," she said.
The filing comes with a long list of assets, including a dog. Coco said Paulhus is required to list all assets, but can exempt certain items like his pet. The list also includes properties and a new car, but Coco said it still won't mean much.
"They certainly own some expensive properties, but there are large bank liens against them. So the equity amount that would go to the estate, less any exemptions, is going to be far reduced," she said.
Ultimately, it will be unlikely for anyone to see their money in full again. Coco says very small amounts will be more likely.
ABC10 reached out to the company's CEO, Colton Paulhus, and Austin Paulhus' attorney for comment multiple times, who said they were not able to comment on the matter.
People who are owed money, also known as creditors, are able to attend a virtual meeting held by the United States Bankruptcy Court Eastern District of California. Experts say it's important for creditors to attend this meeting.
That meeting will be held October 28 at 11 a.m. via Zoom - Farris: Meeting ID 658 478 5225, Passcode 2121432786, Phone 1 (530) 457-9902.
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