The East Bernard-based homebuilder who suddenly shut down his business and left several homeowners with incomplete homes and subcontractor privileges has filed for Chapter 7 bankruptcy.
At the second of three creditor hearings held by teleconference in the past two months, David Pfuntner, owner/operator of Pfuntner Custom Homes, said he regretted the harm his business failure had caused his customers. , suppliers and contractors, but claims that it did not. To have the choice.
“Okay, so you understand that you’ve left all these landlords dry with unfinished homes and owe large sums of money to suppliers?” one of his creditors asked him.
“I understand that, yes. And I feel horrible about it,” he said.
The hearing was conducted on October 19 by bankruptcy trustee Ronald J. Sommers. Throughout the 90-plus-minute hearing, Pfuntner reiterated that he had fought to keep his business afloat, but was saddled with massive debt and rapidly rising costs.
“I really believed until the end that I was going to make it,” Pfuntner said. “I mean, I ran my business successfully for six and a half, seven years. I thought, ‘hey, I’ll get through this,’ and it didn’t work out.”
Sommers began the hearing by asking Pfuntner to verify debts he owes merchant cash advance lenders Global Merchant Cash, CFG Merchant Solutions, Pearl Finance, ByzFunder and Cobalt Finance totaling more than $590,000.
The loans were contracted in December 2021 and in April, May and June of this year. Pfuntner said the lenders charged about 35% of the loan and made daily withdrawals from his account.
Among the people Pfuntner listed as creditors were his brother, father, stepfather, and himself. He said he loaned the company about $15,000, even though his personal and business credit cards were mixed up. He said he often used his personal card to buy things for the company and the company card to buy personal things, making refunds later. Sometimes he dined at the restaurant or made special purchases on the company card, listing them as “bonuses”.
One of the big questions asked by several of his creditors was when did he know he was going to go bankrupt, as he accepted payments from clients in the weeks and days before he released his July 25 letter announcing his closing. He said he only realized he was in financial trouble in March this year and even then estimated he could recover for up to a day or two before sending his letter. .
“Once I sent that text, I didn’t take any more money after that time… I wasn’t going to take any money knowing I’m going to shut down, it just doesn’t make sense,” did he declare.
Pfuntner has openly admitted that he took the money customers paid for specific projects and used it to pay the most pressing bills rather than applying it to his goal.
“Like I’ve said many times before, I just try to keep the doors open. I thought it would only take me a few more projects and I could get by. So yeah, it’s been used for other things, unfortunately,” he said.
A lawyer for one of Pfuntner’s clients asked what happened to the money paid for the cabinets.
“Have the cabinets actually been installed? … Do you know what happened to the money the (customer) pays for the cabinet? asked the lawyer.
“I mean, unfortunately, I got eaten up by, you know, the bills, trying to keep the doors open,” Pfuntner said.
He was questioned about payments he made, vehicles he purchased, vacations he prepaid but did not take, and other financial transactions. Pfuntner explained that his company had one bank account, so everything came in and out of one account.
Pfuntner was asked if he was going to file for personal bankruptcy, and he replied that he was.
“Are you going to use any of the company funds for your personal bankruptcy to pay for yours?” he was asked.
“No, there’s nothing left,” he said.
According to the Texas Southern Bankruptcy Court filing, the creditors’ hearing continued on November 4 and is scheduled to continue on November 16. The case is before Judge Christopher M. Lopez and attorney Kenneth A. Keeling is representing Pfuntner.
For some of the owners who have incomplete works, bankruptcy is of little comfort.
“I was unable to move forward with my home,” Stephanie Kyles said in an email. “We had to request several exceptions from the bank, mainly due to the additional amount it would take to complete the house compared to our current financial standards. We invested nearly $100,000 of our personal funds, which emptied our cash reserves.
“PCH (Pfuntner Custom Homes) also placed a lien on our home so we couldn’t move forward until it was resolved through the bankruptcy courts,” she said.
She said she had filed a complaint with the attorney general’s office and was being investigated.
“I filed a police report with Fort Bend County,” she said. “He is currently still under investigation.”
Amy Kulcak said she was surprised at how poorly the company was run.
“Honestly, I’ve never seen a man run a business as badly as David,” she said. “He and (his wife) Tori used a lot of company funds to pay for personal things.”