Homebuilder files bankruptcy

The East Bernard-based homebuilder who suddenly closed his business and left several homeowners with incomplete homes and liens from subcontractors has field chapter 7 bankruptcy.

In the second of three creditor hearings held by teleconference in the last two months, David Pfuntner, owner/operator of Pfuntner Custom Homes, said he regrets the harm his company’s failure caused his clients, suppliers, and contractors, but claims he didn’t have a choice.

“Okay, and so you do understand that you left all of these homeowners high and dry with uncompleted homes and owing suppliers significant amounts of money?” one of his creditors asked him.

“I do understand that, yes. And I feel horrible about it,” he said.

The hearing was conducted Oct. 19 by bankruptcy trustee Ronald J. Sommers. Throughout the more than 90-minute hearing, Pfuntner reiterated that he fought hard to keep his company afloat but floundered under massive debt and rapidly rising costs.

“I truly believed all the way to the end that I was gonna get out of it,” Pfuntner said. “I mean, I ran my company successfully for six and a half, seven years. I thought, ‘hey, I’m gonna get out of it,’ and it just didn’t work.”

Sommers began the hearing by having Pfuntner verify debts he owes to merchant cash advance loan lenders Global Merchant Cash, CFG Merchant Solutions, Pearl Finance, ByzFunder, and Cobalt Finance totaling over $590,000.

The loans were taken out in December 2021 and in April, May, and June of this year. Pfuntner said the lenders charged about 35% of the loan and took withdrawals from his account daily.

Among the people that Pfuntner listed as creditors were his brother, father, father-in-law, and himself. He said he loaned the company about $15,000, even though his personal and business credit cards were comingled. He said he often used his personal card to buy things for the company and the company card to buy personal things, making reimbursements later. Sometimes he would dine out or make special purchases on the company card, listing them as “bonuses.”

One of the big questions several of his creditors had was when did he know he was going under, as he took payments from clients in the weeks and days before issuing his July 25 letter announcing his closing. He said he did not realize he was in financial trouble until March of this year and even then felt he could recover until a day or two before he sent his letter.

“Once I sent that text, I did not take any more money after that point … I was not going to take money knowing that I’m going to shut down, that doesn’t make any sense,” he said.

Pfuntner openly admitted that he took money clients paid for specific projects and used it to pay whatever bills were most pressing rather than apply it toward its intended purpose.

“Like I’ve stated before, multiple times, I’m just trying to keep the doors open. I thought it would only take me a couple more projects, and I could get out of this. So yes, it was used for other things, unfortunately,” he said.

An attorney for one of Pfuntner’s customers asked what happened to the money paid for cabinets.

“Did the cabinets actually get installed? … Do you know what happened to the money that the (client) is paying for the cabinet?” the attorney asked.

“I mean, unfortunately, I got eaten up with, you know, the bills, trying to keep the doors open,” Pfuntner said.

He was questioned about payments he made, vehicles he purchased, a vacation he pre-paid but has not taken, and other financial transactions. Pfuntner explained that his company had one bank account, so everything came in and went out of one account.

Pfuntner was asked if he was going to file for personal bankruptcy, and he said he was.

“Are you going to be using any of the company’s funds for your personal bankruptcy to pay for yours?” he was asked.

“No, there’s nothing left,” he said.

According to the docket with the Texas Southern Bankruptcy Court, the creditors hearing continued on Nov. 4 and is scheduled to continue on Nov. 16. The case is before Judge Christopher M. Lopez and attorney Kenneth A. Keeling represents Pfuntner.

For some of the homeowners who have incomplete work, the bankruptcy is of little solace.

“I have not been able to move forward with my home,” Stephanie Kyles said in an email. “We have had to request several exceptions from the bank primarily because of how much more money it’s going to take to finish the home compared to our current financial standards. We have invested close to $100k of our personal funds which has drained our liquid reserves.

“PCH (Pfuntner Custom Homes) also placed a lien on our home so we cannot move forward until that is resolved through the bankruptcy courts,” she said.

She said she has filed a complaint with the attorney general’s office and that it is under investigation.

“I have filed a police report with Fort Bend County,” she said. “It’s currently still under investigation.” 

Amy Kulcak said she was surprised to see how poorly the company was managed.

“Honestly, I’ve never seen a man run a business so bad as David has,” she said. “He and (his wife) Tori used a lot of company funds to pay for personal things.”

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