Recession taking its toll as builders file for bankruptcy
Well-known Santa Barbara contractor David Lack has filed for both business and personal bankruptcy, listing a total of $2.6 million in debts for his firm and $3.1 million for himself. But Lack’s is just one in a flurry of filings that have rushed through the region’s bankruptcy court in recent months — many smaller construction firms and sub-contractors have found themselves underwater as well.
It’s a sign that the construction sector is still reeling from the blow of the recession. Even if business is picking up slightly now, many contractors have reached the breaking point after a year or more of dismal revenue, said Kirk Lesh, a real estate economist at California Lutheran University in Thousand Oaks.
“It shows how much distress there is in the industry right now,” he said.