ROANOKE, Va. – The man behind a homebuilding business that suddenly shut down in July explained his side of the story to the people still owed money during a bankruptcy meeting.
Merle Heckman, of David James Homes, spoke Wednesday about the company's downfall to creditors and a United States Department of Justice bankruptcy trustee. The business declared bankruptcy at the end of August.
Heckman says the business's failure can be traced back to a decision to create a second corporation and bank account to manage David James Homes in January.
Heckman says he made the move on the advice of a consulting firm, Second Wind Consulting, which he paid $250,000 to help get his business out of debt.
"This needed to be an arm's-length transaction," Heckman said. "I wanted to see the company continue. I did not want to see homeowners that had homes halfway built get into the position where they couldn't get their house finished."
The secondary corporation and bank account soon received all of the checks made out to David James Homes. However, Heckman said he did not have access to the new bank account and left it all in control of a longtime co-worker, Clark Ware.
"They set up their own bank account, and all the draws were going into their account," Heckman said. "They were deciding who was going to get paid."
Ware resigned from the company in July. Heckman said his resignation meant he could no longer receive money from David James Homes transactions, since Ware controlled the bank account receiving the business's income.
Heckman said David James' demise was a bad business decision that he regretted.
"This, to me, was a way for me for the company to continue on," Heckman said. "It was a way to get all the homeowners out there that had houses under construction get their houses completed."