Quigg files bankruptcy, leaving nine properties, $80+ million debt

| December 29, 2016 | 1 Comment

TYPICAL SIGN on local residential properties under redevelopment by Quigg Builders Inc. and related entities.

Nine entities associated with Canadian developer and recent Fremont Place and Windsor Square resident, Robert Quigg, have just filed for Chapter 7 bankruptcy protection. That type of bankruptcy calls for the liquidation of all of the assets of the entity involved.

Local residents became aware of the Canada native when he first came to town, purchasing historic homes in Windsor Square and Fremont Place. Once in ownership, his companies added square footage, often by underpinning the existing house and building an expanded basement underground.

ROBERT QUIGG in front of Windsor Blvd. home under renovation in 2015.

According to Mr. Quigg, in a July 2015 interview in the Larchmont Chronicle, and elsewhere, only the finest materials and craftsmanship were to be used to renovate the homes, keeping their original architectural details, especially in historically zoned areas like Windsor Square and Hancock Park.

At that time, Mr. Quigg was in the midst of remodeling a house on Windsor Blvd. originally built for Dr. Edwin Janss in 1912-1913.

When Thomas J. Swan III recently bought that multi-million dollar house on Windsor in mid-November, he assumed it would be a turnkey transaction — an expensive, completely remodeled, ready for move-in house, to which he did move from Boston with his family three weeks later. When they got there, Swan realized some things were amiss.

It was hardly turnkey. He found issues with wiring, garage door motors, chimney flues, heating, ventilating and air conditioning (HVAC) and more. He said the HVAC contractor told him that Mr. Quigg’s approach was that “Everything was done to make it look good, rather than making it right.”

The buyer of the Fremont Place house also found issues that had to be addressed by arbitration with, and litigation against, Quigg entities.

QUIGG PROJECT on Windsor Blvd., under construction in 2015 (rear view) and now the home of the Thomas Swan family.

Swan’s new home, and the property sold in Fremont Place, are among eight local neighborhood properties bought by Mr. Quigg and his business entities, generally California limited liability companies (LLCs), in the past few years. In addition, Quigg LLCs own three properties on the Westside — two in Bel Air and one in Beverly Hills.

Of the six unsold neighborhood properties, the other finished house is on Arden Blvd. Mr. Quigg and his wife and child were living in that house before abruptly moving out in the middle of the night on Nov. 29-30 (according to the next-door neighbor). Two other local houses, in the 200 south block of Plymouth Blvd. and the 300 south block of Windsor Blvd., are in some degree of renovation, and another (non-historic) house on Rimpau Blvd. has been demolished — leaving a vacant lot and an unfinished new basement. Finally, two local houses, one on Hudson Ave. and one on June St., appear to have been untouched and sit empty (although the owner, Quigg LA17, LLC, apparently allowed some of the Quigg Builders, Inc. construction team to reside in the house on June St.).


Millions of dollars of debt

Quigg LLCs that own the local properties and that were placed in bankruptcy have more than $44 million in outstanding loans on them, according to publicly available recorded documents. Additional properties on the Westside bring the total outstanding mortgage debt of the Quigg LLCs to $89,145,000, according to the public records.

According to the debtors’ bankruptcy filings, the total debt to secured creditors appears to be “only” $79,936,154. The petition on the Quigg Builders, Inc. bankruptcy case also indicates that the corporation owes about $2,800,000 to 97 unrelated, unsecured trades people / vendors.

Creditors’ meetings in Jan.

For eight of the nine bankruptcy cases, a date for the First Meeting of Creditors had been set for Jan. 5 but was continued to a date still to be announced. The meeting will be in the U.S. Bankruptcy Trustee’s office, 915 Wilshire Blvd., 10th Floor, Room 2. The exact date may be learned by calling 213-617-5295.

The First Meeting of Creditors for the old Bob Newhart property at 420 N. Amapola Lane in Bel Air (Quigg LA14, LLC) will be held at 9 a.m. at that same location on Mon., Jan 9.

According to the title records, five secured lenders were left holding the $89,145,000 debt on the nine properties in bankruptcy. The bankruptcy filings indicate there are four secured lenders, with the amounts due them being $28,213,699, $21,613,071, $15,246,500, and $14,862,884, respectively.

Attempts by the Chronicle to obtain comment from representatives of several of these lenders have been unsuccessful as of the paper’s printing deadline, except for a representative of Hankey Capital LLC, the lender on 317 S. Windsor Blvd. and 347 S. Arden Blvd. The Hankey representative hopes that his company can get possession soon, especially of the Windsor house, which he understands has about $100,000 of work to do to complete the renovation.


Worker complaints

Problems first surfaced about a year ago, when contractors started complaining about not getting paid.

A construction foreman who was involved in many of the projects spoke to the Chronicle but asked to remain anonymous pending his own possible lawsuit for sums still due him.

“It’s a pretty gnarly situation,” he said. “Personally, I’m still working through everything so I can’t go on the record right now. But nearly every single person that was working for him has been left unpaid and upset.”

Cabinetry creditor

Another person involved in the myriad of lawsuits filed prior to the bankruptcies is design cabinetry and furniture manufacturer Constance Posse.

The worst experience of Posse’s 17 years of owning her own business was encountering Mr. Quigg, she said. Worse, she said, than when her business burned down and 85 firefighters came to the scene. “I lost everything… There, I could at least see the phoenix rising against the ashes. Here you’re fighting against the attorneys.”

She said that Mr. Quigg seemed like a nice enough guy when she met him shortly after he “rolled into town.”

The owner of Posse Furniture in West Adams, she worked on two homes for Quigg entities, sending members of her 24-member crew to build kitchen cabinetry and shelves with premium woods including rift oak.

Homes throughout Hancock Park and elsewhere boast the craftsmanship of her millwork. “I have a fantastic reputation,” she said.

She said it was that reputation that drew Mr. Quigg, who, she added, later tried to steal her employees.

About half way through the two-house job, the funds due her from the Quigg entities ran dry. Mr. Quigg was silent, not around much, she says.

His agents threatened and bullied her, she says. “They strong-armed me,” telling her she was costing them hundreds of thousands of dollars. “They told me, ‘he has deep pockets. He’s going to sue you… he’ll put you out of business.’”

On May 25, 2016, Quigg Builders, Inc. and Quigg LA12, LLC sued her and her company for breach of contract.

Posse then countersued for $100,000 in funds unpaid. The Quigg entities filed the bankruptcy petitions the same day the Quigg lawyer answered Posse’s complaint.

When she countersued, “People thought I was crazy.” She said that Mr. Quigg and his team expected her to roll over. “They didn’t think I’d pursue it.”

Under constant threat, she turned to attorney Mark Asdourian (she calls him “Mark the Shark”), who advised her: “We need to hit the reset button and let them know their view of the universe isn’t reality.”

Asdourian told the Chronicle that he also plans to file claims in the bankruptcy cases, and then “get in line with everyone else.”

While Posse doesn’t expect to see the money she is owed, she feels relieved.

“It’s over now.” She says her young children were able to enjoy the holidays, having “seen her go through hell” the past year. “I don’t have to have this in my brain anymore.”

While Posse is glad to be rid of Mr. Quigg and his high-profile, rotating band of lawyers, others fared far worse. “They put other people through horrible situations and out of business,” she says.

[Interestingly, the Quigg Builders, Inc. bankruptcy petition lists lawyers Latham & Watkins LLP as having unpaid legal fees and costs of $109,980.61. That is unlikely to put that firm out of business. – Ed.]

Painter creditor

Shane Gregg, of Gregg Custom Painting, was not put out of business, but he did run out of money.

“[Quigg and his companies] totally ripped me off. When I sued them in August of 2015 for the money they owed, he tried to bankrupt my company.” Gregg was owed around $60,000 in the end.

“Quigg countersued me using a scorched earth tactic. I spent almost $40 grand in legal fees, but by the end I just couldn’t keep going.

“The way the law is, Quigg knows that if you use a small contractor, you can keep them in court until they’re bankrupt and then can’t do anything. He sends legal emails and documents that don’t make sense to the average contractor, and unless the vendor is educated to respond, then Quigg can use the records against them.”

The countersuit from Quigg entities was filed two months after Gregg had filed his complaint and sought to foreclose on the mechanic’s lien that he had placed on the Quigg property. The Quigg entities’ lawsuit charged the painter with breach of contract and six other causes of the action: “He contested the validity of my lien — and we won — but it cost basically what a trial would cost. When he used that tactic, that’s when my attorney told me she would need more money or she couldn’t stay on. I was left without representation because I couldn’t afford an attorney.

“And get this. He filed against my bond company and they had to spend $2,500 to defend themselves. Now the bond company is asking me for the money that they had to spend.

“From the beginning, after I first saw his standard work contract, I got the feeling he might just walk away. I told him then, that I was happy to do business with him but I wanted to use my own contract. It didn’t matter. Now I try to get my money up front.

“I would never, ever work with him again.”

Landscaper creditor  

Working on the Quigg projects also burned landscape contractor Danny Vargas.

He sued Quigg Builders, Inc. for an outstanding balance due him of $6,198. His five-man crew had planted 23 ficus trees, repaired a water line and did other work at 347 S. Arden Blvd. a year ago.

“They asked me to pay for it, and they would reimburse me,” Vargas said.

Except that they didn’t.

Vargas labored at three area Quigg homes. “It was always hard to get the money. He would take a long time to pay…. We had a lot of communication problems. They never answered the phones. It was a very dysfunctional relationship…

“He owes a lot of people money. I think he took the money and ran. People are saying he went to Canada.”  A trial in the Danny Vargas case was scheduled in small claims court Dec. 28, after the Chronicle went to press.

Little hope of payment  

A retired bankruptcy lawyer who lives in Windsor Square told the Chronicle that all existing litigation involving the Quigg entities that were placed into Chapter 7 on Nov. 30 is now “stayed.” He says that he agrees with others that the likelihood of any of the unsecured claimants ever seeing the money they say is owed to them is minimal.

Even the $6,198 that Danny Vargas seeks in his small claims proceeding.

By Suzan Filipek, Billy Taylor and John Welborne

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